Draw

Design

Layout

References

Mailings

Review

View

Help

Exercise $2$

SaxBack Ltd produces three different types of products: A$,$ B and C

A$)$ Traditional costing system

a$)$ Define the overhead rates $(3)$

b$)$ How much are the unit costs of product A$.$ The raw material costs$/$unit are $110$ and labour costs$/$unit are $150.$

B$)$ ABC$-$costing

Indirect costs are $390000$:

$\backslash$table$[[$Salaries $+$ social costs,$234000],[*$Rent$,117000],[$Other costs,$39000]]$

Activities: $$

Resource drivers:

Salaries: number of workers

Purchasing

Producing

Marketing

Rent: area

Purchasing $20m^2$

Producing $120m^2$

Marketing $60m^2$

Other costs: $\%$

Purchasing $10\%$

Producing $30\%$

Marketing $60\%$

Activity drivers:

Purchasing: number of purchases

Producing: production hours

A B C Total

Marketing: marketing hours

$20,30,50,100$

$3004003001000$

$5002003001000$

In September the company produces $1000$ units of product A$,2000$ units of product $B$ and $200$ units of product $C.$

a$)$ How much are the costs of each activity?

b$)$ How much are the unit costs of product $A?$ Direct costs of product $A$ : raw material cos $110/$unit and labour costs $150/$unit$.$