XYZ Ltd produce Product A and Product B. It has three cost centres: Production Department for...

 

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XYZ Ltd produce Product A and Product B. It has three cost centres: Production Department for A, Production Department for B and Canteen (service cost centre). Expected costs for the forthcoming year are: Quantity Produced (in units) Direct Cost: Total Direct Material cost Total Direct Labour hours (at a rate of £20 per hour) Rent and utilities Cleaning cost Canteen salary Total Indirect Cost Production Department- Product A 800 Indirect Cost (Production overhead) Insurance of machinery Floor Area (square metres) Value of machinery Number of employees £42,000 1,500 hours The following information has been provided: Production Department Product A 2,000 £60,000 20 Required: a) Calculate the Total Prime Cost for each product Production Department for Product B 750 £38,000 1,400 hours £ 2,000 48,000 2,000 30.000 82,000 Production Department for Product B 1,600 £44,000 18 Canteen Canteen 200 4 b) Prepare an analysis of the production overheads (indirect cost) by completing apportionment or allocation to the two production cost centres and one canteen. c) Re-apportion the total canteen cost to the two production cost centres d) Calculate the total indirect production cost for each production department e) Calculate the total production cost for each product f) Calculate the production cost per unit for each product (round the answer to two decimal places). e) Calculate the selling price of each product if the mark up is 150% on the production XYZ Ltd produce Product A and Product B. It has three cost centres: Production Department for A, Production Department for B and Canteen (service cost centre). Expected costs for the forthcoming year are: Quantity Produced (in units) Direct Cost: Total Direct Material cost Total Direct Labour hours (at a rate of £20 per hour) Rent and utilities Cleaning cost Canteen salary Total Indirect Cost Production Department- Product A 800 Indirect Cost (Production overhead) Insurance of machinery Floor Area (square metres) Value of machinery Number of employees £42,000 1,500 hours The following information has been provided: Production Department Product A 2,000 £60,000 20 Required: a) Calculate the Total Prime Cost for each product Production Department for Product B 750 £38,000 1,400 hours £ 2,000 48,000 2,000 30.000 82,000 Production Department for Product B 1,600 £44,000 18 Canteen Canteen 200 4 b) Prepare an analysis of the production overheads (indirect cost) by completing apportionment or allocation to the two production cost centres and one canteen. c) Re-apportion the total canteen cost to the two production cost centres d) Calculate the total indirect production cost for each production department e) Calculate the total production cost for each product f) Calculate the production cost per unit for each product (round the answer to two decimal places). e) Calculate the selling price of each product if the mark up is 150% on the production