Question 2 Moon produces tow products the A and B. The direct costs of the two products are given below: Direct materials Direct Labour A Materials handling Production set up costs £4.00 £3.00 The budgeted production for 80,000 units of A and 30,000 units of B. The two main activities identified for the simple production process are material handling and production set ups. Product A requires large production runs and large transfers of materials from stores. However, product B is a more complex product with a number of different types of materials required and shorter and more frequent production runs. The use of these activities for each product is The budgeted fixed overheads of Caplan are £600,000 and they are made up as follows: £200,000 £400,000 £600,000 A Number Material Handling requisitions 100 Number of Production Set Ups 50 Required: B £4.20 £2.20 B 400 200 Total 500 250 Calculate the unit cost of each product using the costing method of Activity Based Costing.
Question 2 Moon produces tow products the A and B. The direct costs of the two products are given below: Direct materials Direct Labour A Materials handling Production set up costs £4.00 £3.00 The budgeted production for 80,000 units of A and 30,000 units of B. The two main activities identified for the simple production process are material handling and production set ups. Product A requires large production runs and large transfers of materials from stores. However, product B is a more complex product with a number of different types of materials required and shorter and more frequent production runs. The use of these activities for each product is The budgeted fixed overheads of Caplan are £600,000 and they are made up as follows: £200,000 £400,000 £600,000 A Number Material Handling requisitions 100 Number of Production Set Ups 50 Required: B £4.20 £2.20 B 400 200 Total 500 250 Calculate the unit cost of each product using the costing method of Activity Based Costing.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 7E: The management of Nova Industries Inc. manufactures gasoline and diesel engines through two...
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![Question 2
Moon produces tow products the A and B. The direct costs of the two products are
given below:
Direct materials
Direct Labour
A
£4.00
£3.00
Materials handling
Production set up costs
The budgeted production for 80,000 units of A and 30,000 units of B.
The two main activities identified for the simple production process are material
handling and production set ups.
Product A requires large production runs and large transfers of materials from stores.
However, product B is a more complex product with a number of different types of
materials required and shorter and more frequent production runs.
A
Number Material Handling requisitions 100
Number of Production Set Ups
50
Required:
B
The budgeted fixed overheads of Caplan are £600,000 and they are made up as
follows:
£200,000
£400,000
£600,000
The use of these activities for each product is
£4.20
£2.20
B
400
200
Total
500
250
Calculate the unit cost of each product using the costing method of Activity Based
Costing.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1279f8ad-7589-4937-8c4f-2ed4ea26f7f9%2Fbe5b7083-f3e9-432e-99ef-e4f409d155bc%2Fzyv50h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 2
Moon produces tow products the A and B. The direct costs of the two products are
given below:
Direct materials
Direct Labour
A
£4.00
£3.00
Materials handling
Production set up costs
The budgeted production for 80,000 units of A and 30,000 units of B.
The two main activities identified for the simple production process are material
handling and production set ups.
Product A requires large production runs and large transfers of materials from stores.
However, product B is a more complex product with a number of different types of
materials required and shorter and more frequent production runs.
A
Number Material Handling requisitions 100
Number of Production Set Ups
50
Required:
B
The budgeted fixed overheads of Caplan are £600,000 and they are made up as
follows:
£200,000
£400,000
£600,000
The use of these activities for each product is
£4.20
£2.20
B
400
200
Total
500
250
Calculate the unit cost of each product using the costing method of Activity Based
Costing.
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