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- This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.
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- August 26, 2015 at 9:45 am #268580
A company is changing its costing system from traditional absorption costing based on labour hours to abc.It has overheads of 156000 which are related to taking materials delivery.The delivery informtion for each product is below
X Y Z
total units 1000 2000 3000
delivery size 200 400 1000
total labour cost= 360000
total labour hrs = 45000
each unit of each product takes same number of direct labour hrs.
Assuming company uses the number of delivery as cost driver.
What is the increase or decrease in cost unit for Z from changes from absorption to the ABC costing.
Sir i get the difference of 14 decrease from moving to ABC but its answer is 22 how sir i am totally stuck please help meAugust 26, 2015 at 11:32 am #268594I don’t know where you found this question, but assuming that you copied it correctly then the difference is $14 (the overheads per unit for Z changes from $26 to $12).
August 26, 2015 at 3:41 pm #268627sir its question from kaplan kit its question no 8 and there answer is 22 decrease
August 27, 2015 at 8:04 am #268729I do not have the Kaplan kit. Assuming you have copied it correctly then Kaplan have made a mistake (there are several errors in their exam kit – have you looked on their website for an errata sheet?)
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