ctivity based costing
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Kindly solve as per the information in the image
Transcribed Image Text:Investigations into the production overhead activities for the period reveal the
following:
Product
A
D
Number of set-ups
4
24
8
32
Number of material orders 4
32
32
Number of times material
Was handled
8
40
12
48
Number of spare parts used 8
20
16
Required:
a) Unit cost per product using the machine hour rate
(6 marks)
Unit cost per product using the activity based costing
(12 marks)
4.
Transcribed Image Text:Question Two
a) Amazon Itd produces three products; A, B, C and D using the same processing plant.
The following information relates to the company:
Product
A
B
D
Units produced
2,000
20,000
2,400
28,000
Material cost per unit (sh)
20
20
64
68
Labour hours per unit
2.
8.
Machine hours per unit
1
Labour cost per unit (sh)
12
12
48
36
The cost accountant analyzed the production overheads recorded under the
following headings:
Overhead cost element
Amount (sh)
Setup costs
17,420,000
Factory costs (machine oriented activity)
149,696,000
Cost of ordering materials
7,680,000
Materials handling costs
30,320,000
Administration cost for spare parts
34,400,000
Investigations into the production overhead activities for the period reveal the
following:
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