File Tools View lanh - Saved to this PC- SECURITY WARNING Macros have been disabled. Enable Content Activity cost pools Production schep Machining of parts Malerials handling Quality control Total 900 37675 757, SSO 2.524.50 Activity coet drivers Newcastle Industrial Manufacturers (NIM) manufactures parts that are used in large earthmoving trucks typically used in the mining industry. It specialises in the production of 3 parts: A 12, P-37 and K-51 NIM has produced K 51 in high volume for many years, however demand has steadily declined over the past 2 years NIM recenlly lost one of its major caus tomers for the part as they were able to buy an equivalent part for 10% less form a foreign manufacturer. Recent analysis by the marketing manager indi cates it is very difficult for NIM to meet current competilor pricing for the K-51 equivalent pails. A-12 and P-37 are more recent additions to NIM's product offerings and signifi cantly more complex to manufacture than the K-51 Roth the A-12 and P-37 re- quire special tools and set-ups for nach batch. NIM believes it has to set a pre- mium price for both of these parts to account lor the complexities involved in their manufacture NIM Currently uses a traditional product casting system, allocating overhead based on machine hours. The current direct costs per urut are as follows: A-125 P-31 S K-515 Material Setups labour mapection Machine Puchach hours une A-12 450 180 1350 000 PAT 13 2.250 246 1 500 1500 K-51 8.400 834 25.200 34.000 Total 804 11,100 200 28.050 105,000 Calculato the total unit usl of the three products using NIM's traditional method of cost allocation 576 End of document. 18.00 Direct materials Direct later 24 24 3.24 15.00 2.16 NIM's management have asked you, as the newly appointed Managoment Accountant, to advise on cost management matters. They would like you to cx amine the possibility of using activity hased costing You have gathered the lol lowing information regarding overhead costs and activity drivers for the past 12 months. Suces 1-2012 EL Type here to search * 2603/2020 File Tools View lanh - Saved to this PC- SECURITY WARNING Macros have been disabled. Enable Content Activity cost pools Production schep Machining of parts Malerials handling Quality control Total 900 37675 757, SSO 2.524.50 Activity coet drivers Newcastle Industrial Manufacturers (NIM) manufactures parts that are used in large earthmoving trucks typically used in the mining industry. It specialises in the production of 3 parts: A 12, P-37 and K-51 NIM has produced K 51 in high volume for many years, however demand has steadily declined over the past 2 years NIM recenlly lost one of its major caus tomers for the part as they were able to buy an equivalent part for 10% less form a foreign manufacturer. Recent analysis by the marketing manager indi cates it is very difficult for NIM to meet current competilor pricing for the K-51 equivalent pails. A-12 and P-37 are more recent additions to NIM's product offerings and signifi cantly more complex to manufacture than the K-51 Roth the A-12 and P-37 re- quire special tools and set-ups for nach batch. NIM believes it has to set a pre- mium price for both of these parts to account lor the complexities involved in their manufacture NIM Currently uses a traditional product casting system, allocating overhead based on machine hours. The current direct costs per urut are as follows: A-125 P-31 S K-515 Material Setups labour mapection Machine Puchach hours une A-12 450 180 1350 000 PAT 13 2.250 246 1 500 1500 K-51 8.400 834 25.200 34.000 Total 804 11,100 200 28.050 105,000 Calculato the total unit usl of the three products using NIM's traditional method of cost allocation 576 End of document. 18.00 Direct materials Direct later 24 24 3.24 15.00 2.16 NIM's management have asked you, as the newly appointed Managoment Accountant, to advise on cost management matters. They would like you to cx amine the possibility of using activity hased costing You have gathered the lol lowing information regarding overhead costs and activity drivers for the past 12 months. Suces 1-2012 EL Type here to search * 2603/2020