SUPERIOR LId makes shoes in two ranges such as Basic and Super. Information relating to each...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
SUPERIOR LId makes shoes in two ranges such as Basic and Super. Information relating to each of these products is set out below. Basic Super Selling price per unit Material Cost per unit Labour time per unit Labour rate per hour Number of Units Produced Each Year £80 £160 £10 E50 2 hrs 3 hrs £12 £12 3,000 4,000 Cost Drivers Mumber of Quality Inspections Number of Sales Invoices Issued each year Number of batches per total production Machine Hours total 50 450 20 380 4 36 7.200 The Director of Superior Ltd has produced the folowing analysis of total Cost Pool (E) Cost Drivers Quality Inspection 120.000 Number of Quality Inapections Sales Invoicing 60.000 Mumber of Sales invoices issued each year Material Handling 80.000 Number of batches per total production Other Overheads 100.000 Machine Hours fotal 360,000 Required: Calculate full cost per unit and profit per unit for each product using - Traditional full cost method of overhead absorption (based on diredt latbsue hours) (2 marks) - Activity-based costing (ABC) method. (4 marks) B) Comment on your findings and suggest an acion plan accordingly (1 mark) SUPERIOR LId makes shoes in two ranges such as Basic and Super. Information relating to each of these products is set out below. Basic Super Selling price per unit Material Cost per unit Labour time per unit Labour rate per hour Number of Units Produced Each Year £80 £160 £10 E50 2 hrs 3 hrs £12 £12 3,000 4,000 Cost Drivers Mumber of Quality Inspections Number of Sales Invoices Issued each year Number of batches per total production Machine Hours total 50 450 20 380 4 36 7.200 The Director of Superior Ltd has produced the folowing analysis of total Cost Pool (E) Cost Drivers Quality Inspection 120.000 Number of Quality Inapections Sales Invoicing 60.000 Mumber of Sales invoices issued each year Material Handling 80.000 Number of batches per total production Other Overheads 100.000 Machine Hours fotal 360,000 Required: Calculate full cost per unit and profit per unit for each product using - Traditional full cost method of overhead absorption (based on diredt latbsue hours) (2 marks) - Activity-based costing (ABC) method. (4 marks) B) Comment on your findings and suggest an acion plan accordingly (1 mark)
Expert Answer:
Answer rating: 100% (QA)
A Computation of cost using the traditional full cost method of overhead absorptionbased on direct l... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
Posted Date:
Students also viewed these accounting questions
-
Number of units sold 55000, Selling price per unit Tk.80, Variable selling expense per unit Tk.13, Variable administrative expense per unit Tk.11, Fixed selling expense Tk.540000, Fixed...
-
The management of Acme Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $100,000. The variable cost for the product is...
-
Selling price per unit $750 Variable cost per unit $450 Annual fixed cost $180,000 Net income after tax $360,000 Tax rate 25% 1)Reduce the selling price by $60. The sales team forecast that with a...
-
Q2 You are an electrical inspector to measure the horizontal illuminance over the work plane of a rectangular room. Given : The size of the room is 10 m length x 7 m width. The illuminance grid p =...
-
Utterson Inc. (Utterson) is a small manufacturing company in northern Ontario. Utterson's owner has approached you to take an equity position in the company. The owner has provided the balance sheets...
-
Consider cells that reside in a heat and particle bath of a classical, relativistic, perfect gas (Fig. 5.1). Each cell has the same volume V and imaginary walls. Assume that the baths temperature T...
-
For the reaction system: \[\begin{aligned}& \mathrm{A}+\mathrm{B} \xrightarrow{k_{1}} \mathrm{C}+\mathrm{A} \xrightarrow{k_{3}} \mathrm{E} \\& \bigvee_{2} \mathrm{D}+\mathrm{A} earrow\end{aligned}\]...
-
How do the accounting treatments for charity services, patient discounts, contractual adjustments, and provision for bad debts differ in terms of their effects on patient service revenues and related...
-
3. A beam section having bD=400mm800mm is required to develop an effective ultimate moment (OM) of 1800kNm. Design the reinforcement using compression steel if necessary. Assume f-32MPa and =500MPa....
-
Lawrence is a 16-year-old youth who was found guilty of vandalism and assault. He was convicted of breaking into his school with two friends and writing insulting slogans on the hallway walls. He was...
-
Shin Corporation provided the following information concerning its pension plan. $ 3,100,000 Projected benefit obligation, January 1, 2020 Plan assets, January 1, 2020 3,300,000 465,000 Net actuarial...
-
What are your reactions to the GLOBE project (led by Professors Javidan and House), specifically the various cultural dimensions and highest-scoring countries the data revealed? Can you think about...
-
There are 22 million American who have federal student loans. The total amount owed is \($1.2\) trillion. And 43% of that 22 million are either behind on their payments or arranged to have their...
-
Nearly every business professor and philosopher have weighed in with models and tests that can be used for resolving ethical issues. The following sections offer summaries of the thoughts and models...
-
Why did the world economy become more integrated? As you read this, is integration growing or retreating? What are the implications of these questions for international managers?
-
Intel, which makes components used in \(80 \%\) of all personal computers, introduced the powerful Pentium chip in 1993. Intel had spent \$1 billion developing the chip, and the cost of producing it...
-
Why do firms need effective vision and mission statement for achieving strategic competitiveness and earning above-average returns? Minimum Words (2000 words)
-
At Glass Company, materials are added at the beginning of the process and conversion costs are added uniformly. Work in process, beginning: Number of units Transferred - in costs Direct materials...
-
Fenster Corporation manufactures windows with wood and metal frames. Fenster has three departments: Glass, Wood, and Metal. The Glass Department makes the window glass and sends it to either the Wood...
-
Anderson Construction assembles residential homes. It uses a job-costing system with two direct cost categories (direct materials and direct labour) and one indirect cost pool (assembly support). The...
-
Automotive Products (AP) designs, manufactures, and sells automotive parts. Actual variable manufacturing overhead costs for 2012 were $308,600. AP's simple costing system allocates variable...
-
What would be the most effective option to increase employee motivation to stay and reduce the driver turnover rate? Why do you believe this option will be effective?
-
How else might the manager have handled the situation to prevent potential issues, including a negative impact on the teams performance?
-
In what ways do you believe providing special work arrangements or accommodations for employees impacts employee motivation? How does it help? How does it hurt?
Study smarter with the SolutionInn App