Sagar Manufacturing Ltd. manufactures 2 products A, B. Also there are 2 activities (QualityChecks and Power) on which it calculates activity cost rates based on Cost Driver capacity. Thecost drivers for Quality Checks and Power are Number of Quality Checks and Kilowatt Hoursrespectively. Further, the following data relating to their activities has been given in below table.SI. No :ActivityCapacityCost1Quality Checks22,500 Checks$4,50,000.002Power1,00,000 KWH2$3,00,000.00The consumption of Cost drivers for the 2 products A, BActivityQuality ChecksProduct - AProduct - B10250 QC6750 QCPower25000 KWH60000 KWH1. Kindly ascertain Cost allocated to each product A and B from each activity.2. Also, Calculate for each activity, the cost of Unused capacity

Name: Sagar Manufacturing Ltd. manufactures 2 products A, B. Also there are
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Description: Sagar Manufacturing Ltd. manufactures 2 products A, B. Also there are 2 activities (QualityChecks and Power) on which it calculates activity cost rates based on Cost Driver capacity. Thecost drivers for Quality Checks and Power are Number of Quality

ABC (activity-based costing) is a method of allocating overhead and indirect costs, such as salaries…

Business

Accounting

Sagar Manufacturing Ltd. manufactures 2 products A, B. Also there are 2 activities (Quality Checks and Power) on which it calculates activity cost rates based on Cost Driver capacity. The cost drivers for Quality Checks and Power are Number of Quality Checks and Kilowatt Hours respectively. Further, the following data relating to their activities has been given in below table. SI. No : Activity Сарacity Cost 1 Quality Checks 22,500 Checks 4,50,000.00 2 Power 1,00,000 KWH 3,00,000.00 %24 %24

Sagar Manufacturing Ltd. manufactures 2 products A, B. Also there are 2 activities (Quality Checks and Power) on which it calculates activity cost rates based on Cost Driver capacity. The cost drivers for Quality Checks and Power are Number of Quality Checks and Kilowatt Hours respectively. Further, the following data relating to their activities has been given in below table. SI. No : Activity Сарacity Cost 1 Quality Checks 22,500 Checks 4,50,000.00 2 Power 1,00,000 KWH 3,00,000.00 %24 %24

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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