It is assumed that the supervisor spends time in proportion of no. of units produced.

Calculate the cost of each unit of the products under:

a) Traditional Costing

b) ABC Costing

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M/s Priya Industries is in the business of manufacturing and selling lubricants. There are 4 types of products. The information available about each: P1 P2 P3 No. of units produced Labour Hours No. of units in 1 packet Machine Hours 1300 250 2 260 2000 350 Rs. 2500000 75000 1000000 600000 5 450 The total cost incurred is as under: Fixed Costs Salaries and Wages Supervisor Cost Factory Overheads Packaging costs 1500 200 3 360 P4 1200 200 3 180 Total 6000 1000 13 1250 M/s Priya Industries is in the business of manufacturing and selling lubricants. There are 4 types of products. The information available about each: P1 P2 P3 No. of units produced Labour Hours No. of units in 1 packet Machine Hours 1300 250 2 260 2000 350 Rs. 2500000 75000 1000000 600000 5 450 The total cost incurred is as under: Fixed Costs Salaries and Wages Supervisor Cost Factory Overheads Packaging costs 1500 200 3 360 P4 1200 200 3 180 Total 6000 1000 13 1250

Answer rating: 100% (QA)

To calculate the cost of each unit of the products under traditional costing and ABC costing we need to allocate the costs based on different cost drivers a Traditional Costing Under traditional costi... View the full answer