You are required to calculate the cost per unit of each product A and B based on: (0) Traditional method of charging overheads. (1) Activity based costing method.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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PROBLEM-06
A company manufacturing two products furnishes the following data for a year:
Product
Annual output (Units) Total machine-hours
A
20,000
5,000
60,000
B
1,20,000
The annual overheads are as under:
Volume-related activity costs
Setup-related costs
Tk. 5,50,000.00
8,20,000.00
Purchase-related costs
6,18,000.00
You are required to calculate the cost per unit of each product A and B based on:
(1) Traditional method of charging overheads.
(ii) Activity based costing method.
Total number of
purchase orders
160
384
Total number of set-
ups
20
44
Transcribed Image Text:PROBLEM-06 A company manufacturing two products furnishes the following data for a year: Product Annual output (Units) Total machine-hours A 20,000 5,000 60,000 B 1,20,000 The annual overheads are as under: Volume-related activity costs Setup-related costs Tk. 5,50,000.00 8,20,000.00 Purchase-related costs 6,18,000.00 You are required to calculate the cost per unit of each product A and B based on: (1) Traditional method of charging overheads. (ii) Activity based costing method. Total number of purchase orders 160 384 Total number of set- ups 20 44
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