SUPERIOR LId makes shoes in two ranges such as Basic and Super. Information relating to each...
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SUPERIOR LId makes shoes in two ranges such as Basic and Super. Information relating to each of these products is set out below. Basic Super Selling price per unit Material Cost per unit Labour time per unit Labour rate per hour Number of Units Produced Each Year £80 £160 £10 E50 2 hrs 3 hrs £12 £12 3,000 4,000 Cost Drivers Mumber of Quality Inspections Number of Sales Invoices Issued each year Number of batches per total production Machine Hours total 50 450 20 380 4 36 7.200 The Director of Superior Ltd has produced the folowing analysis of total Cost Pool (E) Cost Drivers Quality Inspection 120.000 Number of Quality Inapections Sales Invoicing 60.000 Mumber of Sales invoices issued each year Material Handling 80.000 Number of batches per total production Other Overheads 100.000 Machine Hours fotal 360,000 Required: Calculate full cost per unit and profit per unit for each product using - Traditional full cost method of overhead absorption (based on diredt latbsue hours) (2 marks) - Activity-based costing (ABC) method. (4 marks) B) Comment on your findings and suggest an acion plan accordingly (1 mark) SUPERIOR LId makes shoes in two ranges such as Basic and Super. Information relating to each of these products is set out below. Basic Super Selling price per unit Material Cost per unit Labour time per unit Labour rate per hour Number of Units Produced Each Year £80 £160 £10 E50 2 hrs 3 hrs £12 £12 3,000 4,000 Cost Drivers Mumber of Quality Inspections Number of Sales Invoices Issued each year Number of batches per total production Machine Hours total 50 450 20 380 4 36 7.200 The Director of Superior Ltd has produced the folowing analysis of total Cost Pool (E) Cost Drivers Quality Inspection 120.000 Number of Quality Inapections Sales Invoicing 60.000 Mumber of Sales invoices issued each year Material Handling 80.000 Number of batches per total production Other Overheads 100.000 Machine Hours fotal 360,000 Required: Calculate full cost per unit and profit per unit for each product using - Traditional full cost method of overhead absorption (based on diredt latbsue hours) (2 marks) - Activity-based costing (ABC) method. (4 marks) B) Comment on your findings and suggest an acion plan accordingly (1 mark)
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Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
Posted Date:
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