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.

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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