Furniture company Ltd has presented the following budgeted overhead costs for the month of April, 2024 together with the details as shown below: Cost pool particulars Amount (Ugx) Ordering costs 25,000,000 Inspection costs 40,000,000 Set up costs 6,000,000 Material handling costs 32,000,000 Details of the cost drivers include the following:   Total number of orders in the month 500 Total number of machine set ups 250 Total number of material handling 800 Total number of inspections 320 The company has budgeted to produce four furniture products; one of them is Deluxe chair which requires the following:   Ugx Material cost 10,000,000 Labour cost 12,000,000 Direct expenses 18,000,000   Number of 0rders 10 Number of Inspections 5 Number of machine Set up 40 Number of Material handling 30 Required: Using Activity Based Costing method, compute the total cost of producing Deluxe chair

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Furniture company Ltd has presented the following budgeted overhead costs for the month of April, 2024 together with the details as shown below:

Cost pool particulars

Amount (Ugx)

Ordering costs

25,000,000

Inspection costs

40,000,000

Set up costs

6,000,000

Material handling costs

32,000,000

Details of the cost drivers include the following:

 

Total number of orders in the month

500

Total number of machine set ups

250

Total number of material handling

800

Total number of inspections

320

The company has budgeted to produce four furniture products; one of them is Deluxe chair which requires the following:

 

Ugx

Material cost

10,000,000

Labour cost

12,000,000

Direct expenses

18,000,000

 

Number of 0rders

10

Number of Inspections

5

Number of machine Set up

40

Number of Material handling

30

Required:

Using Activity Based Costing method, compute the total cost of producing Deluxe chair 

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