QUESTION $1-$ PART A

Required:

a$)$ Determine the company$$s bid if the bid if volume$-$based costing is used and the bid is based upon full manufacturing cost plus $30$ per cent. $(3$ marks$)$

b$)$ Determine the company$$s bid if the bid if activity$-$based costing is used and the bid

is based upon full manufacturing cost plus $30$ per cent. $(8$ marks$)$

c$)$ Which product costing method produces the more competitive bid? Explain why.

$(6$ marks$)$

d$)$ How can Microtic Manufacturing be assured that the mark up of $30\%$ on full manufacturing cost is sufficient to cover non$-$manufacturing costs and desired profit? $(3$ marks$)$