Kablal Itd. produces desks and chairs in the same factory. the factory has two departments; assembly...

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Kablal Itd. produces desks and chairs in the same factory. the factory has two departments; assembly and finishing. each desk uses 3kg of wood at a cost of ghc4 per kg, and takes 4hours to produce, 3hours in assembly and 1hour in finishing. each chairs uses 2kg of wood at a cost ghc4 per kg, and takes 1 hour to produce -1/2hour in assembly and 1/2hour in finishing. all labour is paid at the rate of ghc2 per hour. fixed cost of production are estimated to be ghc700,000 p.a. of this total, ghc100,000 is the salary of the supervisors ghc60,000 to assembly supervisor and ghc40,000 to finishing supervisor. the remaining overheads are to be split into 40% assembly and 60% finishing. the company expects to produce 30,000 desks and 20,000 chairs. overheads are to be absorbed on the basis of labour hours. calculate the cost per unit for the desks and chairs. Kablal Itd. produces desks and chairs in the same factory. the factory has two departments; assembly and finishing. each desk uses 3kg of wood at a cost of ghc4 per kg, and takes 4hours to produce, 3hours in assembly and 1hour in finishing. each chairs uses 2kg of wood at a cost ghc4 per kg, and takes 1 hour to produce -1/2hour in assembly and 1/2hour in finishing. all labour is paid at the rate of ghc2 per hour. fixed cost of production are estimated to be ghc700,000 p.a. of this total, ghc100,000 is the salary of the supervisors ghc60,000 to assembly supervisor and ghc40,000 to finishing supervisor. the remaining overheads are to be split into 40% assembly and 60% finishing. the company expects to produce 30,000 desks and 20,000 chairs. overheads are to be absorbed on the basis of labour hours. calculate the cost per unit for the desks and chairs.

Answer rating: 100% (QA)

To calculate the cost per unit for the desks and chairs we need to consider the costs of materials labor and overheads allocated to each unit Cost Cal... View the full answer