Answer all questions and show your workings Question 1 : Function-based costing JIM Ltd has identified the following overhead costs and cost drivers for next year Expenses /cost Selling cost Administration Cost Manufacturing overhead cost Utilities cost [factory] Cost Driver Direct Labour Hours Machine Hours Expected (cost) $ 55,000 35,000 38,000 22,000 El actual transactions) 3500 9,000 The following is the cost of 2 products made by the company: Product Y Machine Hours 9,000 The following is the cost of 2 products made by the company: Direct materials Direct Labor Hour Rate Units completed DLH (hours) Machine hours Actual Cost $ Product X $4200 $29.00 250 460 185 1500 Product Y $3600 $14.00 210 320 160 5100 REQUIRED 1. Calculate the Predetermined Rate [PR] for product X using machine hours and product Y using direct labour hours 2. What is the applied cost assigned to product X and product Y? 3. Calculate the total product cost using FBC for both products 4. Calculate the unit cost for each product 5. Is the applied cost for each product under or over-applied? 6. What are the disadvantages of FBC and what solution has been offered as alternative? [40 marks] Question 2 Project Selection