Homework Help is Here – Start Your Trial Now!
Business
Accounting
PROBLEM-05 The Aeronautical Ltd. has production facility specializing in jobs for the aircraft components market. The traditional costing system has two direct-cost categories, namely, direct materials and direct manufacturing labour and a single direct cost pool, that is manufacturing overhead allocated on the basis of direct labour hours. The indirect cost allocation rate would have been Tk. 115.00 per direct manufacturing labour hour. Tk. 115 direct manufacturing labour-hours. The company has now decided to replace the single indirect cost pool with five indirect cost pools, representing five activity areas each with its own supervising and budget responsibility. The relevant data are as follows: Activity area Cost driver used as an allocation base Cost allocation rate Material handling Parts Tk. 0.40 Lathe work 0.20 Turns Machine-hours Milling 20.00 Grinding 0.80 Parts Units tested Testing 15.00 Two representative jobs processed under the new system of the facility at the most recent period had the following features: Particulars Job 101 Job 102 Direct material costs per job Tk. 9,700.00 Tk. 59,900.00 Direct manufacturing labour cost per job Tk. 750.00 Tk.11,250.00 Direct manufacturing labour-hours per job 25 375 Parts per job 500 2,000 Turns per job 20,000 60,000 Machine -hours per job 150 1,050 Units per job 10 200 Required: (a) Compute the per unit manufacturing cost of each job under the traditional job-cutting system. (b) Compute the per unit manufacturing costs of each job under the activity-based costing system.

PROBLEM-05 The Aeronautical Ltd. has production facility specializing in jobs for the aircraft components market. The traditional costing system has two direct-cost categories, namely, direct materials and direct manufacturing labour and a single direct cost pool, that is manufacturing overhead allocated on the basis of direct labour hours. The indirect cost allocation rate would have been Tk. 115.00 per direct manufacturing labour hour. Tk. 115 direct manufacturing labour-hours. The company has now decided to replace the single indirect cost pool with five indirect cost pools, representing five activity areas each with its own supervising and budget responsibility. The relevant data are as follows: Activity area Cost driver used as an allocation base Cost allocation rate Material handling Parts Tk. 0.40 Lathe work 0.20 Turns Machine-hours Milling 20.00 Grinding 0.80 Parts Units tested Testing 15.00 Two representative jobs processed under the new system of the facility at the most recent period had the following features: Particulars Job 101 Job 102 Direct material costs per job Tk. 9,700.00 Tk. 59,900.00 Direct manufacturing labour cost per job Tk. 750.00 Tk.11,250.00 Direct manufacturing labour-hours per job 25 375 Parts per job 500 2,000 Turns per job 20,000 60,000 Machine -hours per job 150 1,050 Units per job 10 200 Required: (a) Compute the per unit manufacturing cost of each job under the traditional job-cutting system. (b) Compute the per unit manufacturing costs of each job under the activity-based costing system.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Question
Kindly solve accordingly
PROBLEM-05 The Aeronautical Ltd. has production facility specializing in jobs for the aircraft components market. The traditional costing system has two direct-cost categories, namely, direct materials and direct manufacturing labour and a single direct cost pool, that is manufacturing overhead allocated on the basis of direct labour hours. The indirect cost allocation rate would have been Tk. 115.00 per direct manufacturing labour hour. Tk. 115 direct manufacturing labour-hours. The company has now decided to replace the single indirect cost pool with five indirect cost pools, representing five activity areas each with its own supervising and budget responsibility. The relevant data are as follows: Activity area Cost driver used as an allocation base Cost allocation rate Material handling Parts Tk. 0.40 Lathe work 0.20 Turns Machine-hours Milling 20.00 Grinding 0.80 Parts Units tested Testing 15.00 Two representative jobs processed under the new system of the facility at the most recent period had the following features: Particulars Job 101 Job 102 Direct material costs per job Tk. 9,700.00 Tk. 59,900.00 Direct manufacturing labour cost per job Tk. 750.00 Tk.11,250.00 Direct manufacturing labour-hours per job 25 375 Parts per job 500 2,000 Turns per job 20,000 60,000 Machine -hours per job 150 1,050 200 Units per job 10 Required: (a) Compute the per unit manufacturing cost of each job under the traditional job-cutting system. (b) Compute the per unit manufacturing costs of each job under the activity-based costing system.
Transcribed Image Text:PROBLEM-05 The Aeronautical Ltd. has production facility specializing in jobs for the aircraft components market. The traditional costing system has two direct-cost categories, namely, direct materials and direct manufacturing labour and a single direct cost pool, that is manufacturing overhead allocated on the basis of direct labour hours. The indirect cost allocation rate would have been Tk. 115.00 per direct manufacturing labour hour. Tk. 115 direct manufacturing labour-hours. The company has now decided to replace the single indirect cost pool with five indirect cost pools, representing five activity areas each with its own supervising and budget responsibility. The relevant data are as follows: Activity area Cost driver used as an allocation base Cost allocation rate Material handling Parts Tk. 0.40 Lathe work 0.20 Turns Machine-hours Milling 20.00 Grinding 0.80 Parts Units tested Testing 15.00 Two representative jobs processed under the new system of the facility at the most recent period had the following features: Particulars Job 101 Job 102 Direct material costs per job Tk. 9,700.00 Tk. 59,900.00 Direct manufacturing labour cost per job Tk. 750.00 Tk.11,250.00 Direct manufacturing labour-hours per job 25 375 Parts per job 500 2,000 Turns per job 20,000 60,000 Machine -hours per job 150 1,050 200 Units per job 10 Required: (a) Compute the per unit manufacturing cost of each job under the traditional job-cutting system. (b) Compute the per unit manufacturing costs of each job under the activity-based costing system.
Expert Solution
steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Corporate Ethics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS