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Question 3 Matilda Manufacturing designs and manufactures four products A, B, C and D for the telecommunications industry. Output and cost data for the period just ended are as follows: ABCD No of production Material Output runs in the period Units 15 20 100 350 4 3 6 4 17 Short run variable costs Set-up costs cost per unit £ Expediting and scheduling costs Materials Handling Costs 40 80 40 80 Direct labour cost per hour is £6. Overhead costs are as follows: £ Direct labour hours per unit 4,000 8,000 7,000 6,000 25,000 1 3 3 2 The following cost drivers have been identified: Short run Variable Costs Set up costs Expediting and Scheduling Costs Materials Handling Costs Required: a) Calculate the product cost using a Traditional and ABC approach. = Production Runs = Production Runs = Machine Hours = Labour Hours Machine hours per unit 2422

Question 3 Matilda Manufacturing designs and manufactures four products A, B, C and D for the telecommunications industry. Output and cost data for the period just ended are as follows: ABCD No of production Material Output runs in the period Units 15 20 100 350 4 3 6 4 17 Short run variable costs Set-up costs cost per unit £ Expediting and scheduling costs Materials Handling Costs 40 80 40 80 Direct labour cost per hour is £6. Overhead costs are as follows: £ Direct labour hours per unit 4,000 8,000 7,000 6,000 25,000 1 3 3 2 The following cost drivers have been identified: Short run Variable Costs Set up costs Expediting and Scheduling Costs Materials Handling Costs Required: a) Calculate the product cost using a Traditional and ABC approach. = Production Runs = Production Runs = Machine Hours = Labour Hours Machine hours per unit 2422

FINANCIAL ACCOUNTING
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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Question 3 Matilda Manufacturing designs and manufactures four products A, B, C and D for the telecommunications industry. Output and cost data for the period just ended are as follows: ABCD No of production Material Output runs in the cost per unit period £ 40 80 40 80 Units 15 20 100 350 4 3 6 4 17 Short run variable costs Set-up costs Expediting and scheduling costs Materials Handling Costs Direct labour hours per unit 4,000 8,000 7,000 6,000 25,000 1 Direct labour cost per hour is £6. Overhead costs are as follows: £ Nww. 2 The following cost drivers have been identified: Short run Variable Costs Set up costs Expediting and Scheduling Costs Materials Handling Costs Required: a) Calculate the product cost using a Traditional and ABC approach. = Production Runs = Production Runs = Machine Hours = Labour Hours Machine hours per unit ~4~~ 2 2 2 b) Discuss and analyse alternative methods available to businesses of allocating costs.
Transcribed Image Text:Question 3 Matilda Manufacturing designs and manufactures four products A, B, C and D for the telecommunications industry. Output and cost data for the period just ended are as follows: ABCD No of production Material Output runs in the cost per unit period £ 40 80 40 80 Units 15 20 100 350 4 3 6 4 17 Short run variable costs Set-up costs Expediting and scheduling costs Materials Handling Costs Direct labour hours per unit 4,000 8,000 7,000 6,000 25,000 1 Direct labour cost per hour is £6. Overhead costs are as follows: £ Nww. 2 The following cost drivers have been identified: Short run Variable Costs Set up costs Expediting and Scheduling Costs Materials Handling Costs Required: a) Calculate the product cost using a Traditional and ABC approach. = Production Runs = Production Runs = Machine Hours = Labour Hours Machine hours per unit ~4~~ 2 2 2 b) Discuss and analyse alternative methods available to businesses of allocating costs.
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