AJ manufacturing company produces about one hundred products. Its largest selling product is product X and...

 

Transcribed Image Text:

AJ manufacturing company produces about one hundred products. Its largest selling product is product X and its smallest is product Y. relevant data is given below: Total product Particulars Product Product X Y 5000 1000 50,000 Units produced per annum Material cost per unit Direct labor per unit Machine time per unit No. of set ups per unit No. of purchase orders for material Rs.1 Rs.1 15 min 15 min 1 hour 1 hour 24 2 500 36 6 2800 No. of times material handled 200 15 12000 Rs.5.00 Direct labor cost per hour Overhead Costs: Set up Purchasing Material handling 280,000 145,000 130,000 660,000 1,215,000 Machines Total Machine hours are 600,000 hours. Required: a) Find out the production unit cost of product X and product Y. b) Using conventional product costing machine hour overhead absorption rate. c) Using ABC (Activity Base Costing ) compare the results of methods and comment. Go AJ manufacturing company produces about one hundred products. Its largest selling product is product X and its smallest is product Y. relevant data is given below: Total product Particulars Product Product X Y 5000 1000 50,000 Units produced per annum Material cost per unit Direct labor per unit Machine time per unit No. of set ups per unit No. of purchase orders for material Rs.1 Rs.1 15 min 15 min 1 hour 1 hour 24 2 500 36 6 2800 No. of times material handled 200 15 12000 Rs.5.00 Direct labor cost per hour Overhead Costs: Set up Purchasing Material handling 280,000 145,000 130,000 660,000 1,215,000 Machines Total Machine hours are 600,000 hours. Required: a) Find out the production unit cost of product X and product Y. b) Using conventional product costing machine hour overhead absorption rate. c) Using ABC (Activity Base Costing ) compare the results of methods and comment. Go

Answer rating: 100% (QA)

Solution production unit cost of product X and product Y conventional product costing machine hour o... View the full answer