Question (1)

The company makes four products, which involve ordering materials, setting up machinery, and handling production runs. The indirect costs of these activities are as follows.

$

Handling 90,000

Ordering 30,000

Set-up 60,000

Total 180,000

Other information relating to the products is as follows:

Products Number of units Number of orders Set-ups Handling hours

X 1,000 100 600 140

Y 2,800 60 500 140

Z 3,600 30 300 80

W 6,000 10 200 60

Required: Pre-pare a schedule of each activity's costs per unit and calculate the indirect cost to be allocated to each of the four products.