During 2018, Coconut Plantations Pty Ltd continued to grow. Jo Geter, the manager, decided to add detergents
Question:
During 2018, Coconut Plantations Pty Ltd continued to grow. Jo Geter, the manager, decided to add detergents to its existing range of soap and candles. The management accountant, Nick Gee, expressed concern regarding the accuracy of the product costing system now that the diversity of output had increased. To further understand the costs, Nick undertook an activity analysis of indirect costs. His findings are as follows.
The products’ use of each cost driver is estimated to be as follows.
Required
a. Calculate the activity cost rate for each activity.
b. Calculate the indirect product cost based on the activity analysis.
Step by Step Answer:
Accounting Business Reporting For Decision Making
ISBN: 9780730363415
6th Edition
Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver