5. Calculate the overhead allocated to each product unit. 6. Combine the overhead and direct costs...

Transcribed Image Text:

5. Calculate the overhead allocated to each product unit. 6. Combine the overhead and direct costs to give the cost per unit Labour HR Machine setup Parts administration Production orders Materials received Machine running Overhead per unit Product A (2,000 units) Product B (10,000 units) Product A Product B £16,000 £64,000 £90,000 £60,000 £100,000 £60,000 £17,500 £52,500 £18,000 £72,000 £75,000 £175,000 £316,500 £483,500 £158 £48 Direct materials Direct labour Overhead Product A Product B Unit product cost using ABC costing Compare this with the unit product cost calculated using conventional costing Product A Product B £25 £17 £60 £48 £158 £243 £165 £48 £113 £129 5. Calculate the overhead allocated to each product unit. 6. Combine the overhead and direct costs to give the cost per unit Labour HR Machine setup Parts administration Production orders Materials received Machine running Overhead per unit Product A (2,000 units) Product B (10,000 units) Product A Product B £16,000 £64,000 £90,000 £60,000 £100,000 £60,000 £17,500 £52,500 £18,000 £72,000 £75,000 £175,000 £316,500 £483,500 £158 £48 Direct materials Direct labour Overhead Product A Product B Unit product cost using ABC costing Compare this with the unit product cost calculated using conventional costing Product A Product B £25 £17 £60 £48 £158 £243 £165 £48 £113 £129

Answer rating: 100% (QA)

The detailed answer for the above question is provided below ANS... View the full answer