A company manufacturing two products furnishes the following data for a year. Product Annual Output [Units] Total
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Question:
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.
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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