Question: Please explain how to get each answer Coalition Plc has decided to adopt a more modern approach to overhead recovery-activity based costing from the coming
Please explain how to get each answer Coalition Plc has decided to adopt a more modern approach to overhead recovery-activity based costing from the coming accounting period onwards. Four products are currently produced and by the company. The following details have been given to you by the Chief Management Accountant concerning the four products. The four products, because of their similarities are produced in production runs of 25 units. Up to now overheads have been absorbed to the four products on the basis of machine hours. You ascertain that these overheads could be analysed into 'cost pools' as follows: The number of requisitions raised on the stores was 200 for each product and the number of orders executed was 42, each being for a batch of 100 of a product. Required (a) Calculate the unit and total cost of each product if all overheads are absorbed using machine hours method. (b) Calculate the unit and total cost of each product if all overheads are absorbed using activity based costing. (c) Comments on your results of (a) and (b) above
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