Two products X and Y are made being using similar equipment and methods.

Data for the previous year is as follows:

 

Required

Calculate the overhead to be absorbed per unit based on

a) Conventional absorption costing’s using a labour rate;

b) ABC approach using suitable drives.

Transcribed Image Text:

Units produced Labour hour per unit Machine hour per unit Set ups in period Orders handled per period Overhead for the period Relating to productions set-ups Relating to order handling Relating to machine activity X 6 000 1 4 15 12 $ 89,500 15,000 27,500 Y 8 000 2 2 45 60 Units produced Labour hour per unit Machine hour per unit Set ups in period Orders handled per period Overhead for the period Relating to productions set-ups Relating to order handling Relating to machine activity X 6 000 1 4 15 12 $ 89,500 15,000 27,500 Y 8 000 2 2 45 60

Answer rating: 100% (QA)

Answer a Conventional Absorption Costing using a Labour Rate Calculate the Predetermined Overhead R... View the full answer