A company manufacturing two products furnishes the following data for a year.

Product	Annual Output [Units]	Total machine hours	Total number of purchase orders	Total number of set ups
A	5,000	20,000	160	20
B	60,000	1,20,000	384	44

The annual overheads are as under

Particulars	Amount in Rupees
Volume related activity costs	5,50,000
Set up related costs	8,20,000
Purchase related costs	6,18,000
Total costs	19,88,000

You are required to calculate the cost per unit of each Product A and B, based on,

I. Traditional method of charging overheads

II. Activity Based Costing method.

Answer rating: 100% (QA)

SOLUTION I Traditional Method of Charging Overheads In the traditional method we will use the total ... View the full answer