Pricing: meteor model retails for 840€, Moonlight Model retails 1485€The company incurs overheads which total €1200.000. Α total of 15000€ direct labour hours are worked.Department cost centerBuliding rent50.000utilities50.000machining600.000Procurement150.000Sales150.000General Management200.000Total1.200.000 Cost centerMachiningFinishingAdministrationFloor Area1.500 sq.m 1.500 sq.m2.000 sq.mMachine Hours25.000 hours5.000 hours Direct Labour Hours5000 hours10.000 hours Each unit of Meteor was machined for 10 hours in Machining and 1 hour in Finishing. Each unit of the Moonlight was machined for 2 hours in Machining and 1 hour in Finishing.Calculate the full cost for each bicycle model (e.g. Meteor and Moonlight) based on:a. Plant-wide (single or blanket) overhead ratesb. Department cost centre rates (where overhead absorption rates are based on an overhead analysis sheet)c. Activity-based costing (ABC)

a. Plant-wide (single or blanket) overhead rates:To calculate the full cost for each bicycle model…

Answered: a. Plant-wide (single or blanket)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Pricing: meteor model retails for 840€, Moonlight Model retails 1485€

The company incurs overheads which total €1200.000. Α total of 15000€ direct labour hours are worked.

Department cost center

Buliding rent	50.000
utilities	50.000
machining	600.000
Procurement	150.000
Sales	150.000
General Management	200.000
Total	1.200.000

Cost center	Machining	Finishing	Administration
Floor Area	1.500 sq.m	1.500 sq.m	2.000 sq.m
Machine Hours	25.000 hours	5.000 hours
Direct Labour Hours	5000 hours	10.000 hours

Each unit of Meteor was machined for 10 hours in Machining and 1 hour in Finishing. Each unit of the Moonlight was machined for 2 hours in Machining and 1 hour in Finishing.

Calculate the full cost for each bicycle model (e.g. Meteor and Moonlight) based on:

a. Plant-wide (single or blanket) overhead rates

b. Department cost centre rates (where overhead absorption rates are based on an overhead analysis sheet)

c. Activity-based costing (ABC)

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