Aliff and her costs analysts prepared the following projections relating to the for the last two-quarters...
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Aliff and her costs analysts prepared the following projections relating to the for the last two-quarters of 2022: Jackets Trousers Shirts Expected Sales (units) Direct Labour Hours (DLH) 180 360 600 720 1,080 3,000 RM RM RM Revenue 30,780 3,150 3,600 8,640 83,520 90,000 21,000 15,000 36,000 Direct Material Direct Labour 2,520 5,400 12,960 Manufacturing Overhead An analysis on the manufacturing overhead costs further reveals the following activities: Estimated Overhead Time Spent Activities RM (hours) 7,620 Receiving 11,430 Scheduling 950 2,400 Set-up 100 100 Data processing 2,280 36,000 2,400 Fabrication 4,800 Quality inspection Packing and shipping 1,140 480 5,700 4,800 RM57,600 aliff believes that in shifting the traditional costing system to the activity-based costing (ABC) system, managers will be able to increase their awareness of the activities performed by the company in its production and support activities. Together with SUW Production Manager, her the analysts were able to draft the expected use of activities for each product line as follows: Activities Cost Drivers Jackets Trousers Shirts Receiving Scheduling Set-up Data processing Fabrication metres 900 720 6,000 number of orders 60 120 200 number of setups number of orders machine hours number of inspections 1 3 6. 60 120 200 720 1,080 3,000 Quality inspection Packing and shipping 18 36 60 finished units 180 360 600 Determine the amount of overhead costs assigned to each product line using activity-based costing. (10 marks) By what amount the traditional costing system would under-or overcost the total product cost of each of the product lines? (9 marks) Aliff and her costs analysts prepared the following projections relating to the for the last two-quarters of 2022: Jackets Trousers Shirts Expected Sales (units) Direct Labour Hours (DLH) 180 360 600 720 1,080 3,000 RM RM RM Revenue 30,780 3,150 3,600 8,640 83,520 90,000 21,000 15,000 36,000 Direct Material Direct Labour 2,520 5,400 12,960 Manufacturing Overhead An analysis on the manufacturing overhead costs further reveals the following activities: Estimated Overhead Time Spent Activities RM (hours) 7,620 Receiving 11,430 Scheduling 950 2,400 Set-up 100 100 Data processing 2,280 36,000 2,400 Fabrication 4,800 Quality inspection Packing and shipping 1,140 480 5,700 4,800 RM57,600 aliff believes that in shifting the traditional costing system to the activity-based costing (ABC) system, managers will be able to increase their awareness of the activities performed by the company in its production and support activities. Together with SUW Production Manager, her the analysts were able to draft the expected use of activities for each product line as follows: Activities Cost Drivers Jackets Trousers Shirts Receiving Scheduling Set-up Data processing Fabrication metres 900 720 6,000 number of orders 60 120 200 number of setups number of orders machine hours number of inspections 1 3 6. 60 120 200 720 1,080 3,000 Quality inspection Packing and shipping 18 36 60 finished units 180 360 600 Determine the amount of overhead costs assigned to each product line using activity-based costing. (10 marks) By what amount the traditional costing system would under-or overcost the total product cost of each of the product lines? (9 marks)
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1 Activities Jackets Trousers Shirts TOTAL Receiving 900 720 6000 7620 Sch... View the full answer
Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott
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