ABAS, a Swedish-Danish engineering company, shows the following direct costs, etc. for their products. Product A Product
Question:
ABAS, a Swedish-Danish engineering company, shows the following direct costs, etc. for their products.
| Product A | Product B | Product C | |
| Direct. material, SEK / pc. | 8,00 | 10,00 | 14,00 |
| Direct salary, SEK / pc. | 10,00 | 20,00 | 16,00 |
| Direct sales cost, SEK / pc. | 12,00 | 10,00 | 14,00 |
| Volume, number | 14 000 | 10 000 | 12 000 |
As the company, as part of the follow-up of the profitability of the products, regularly prepares mark-up calculations, the following information is available on indirect costs:
• Material costs, fixed, distributed through direct material in kronor. Material cost surcharge, MO surcharge = 80%.
• Manufacturing costs, fixed, are distributed through direct salary in kronor. Manufacturing cost surcharge, TO surcharge = 110%.
• Business costs, fixed, are distributed through manufacturing costs. Business cost surcharge, AO surcharge = 50%.
Based on the above, you can now answer the following two sub-questions. Enter your answers in whole kronor, SEK. Do not put out plus / minus signs and have no space or dot for thousands. Each correctly answered sub-question gives 4 points.
a) Total material costs amount to: SEK.
b) Total cost for product A amounts to : SEK.
Expert Answer:
Operations and Supply Chain Management
ISBN: 978-0078024023
14th edition
Authors: F. Robert Jacobs, Richard Chase
