Forums › ACCA Forums › ACCA PM Performance Management Forums › ABC costing question
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- November 12, 2014 at 2:02 pm #209361
Please any one can help me to solve this question: not sure of cost drivers for Utilities/Salaries of supervisor/salaries of cleaners/Misc cost:
RCL manufactures three products. Presently, overheads are allocated to each product on
the basis of direct labour hours. In order to determine the cost of products more accurately,
RCL has decided to implement Activity Based Costing for allocation of overheads.
The following data has been extracted from RCL’s budget for the next year:
Products X Y Z
Cost per unit: ————-Rupees ————-
Direct material @ Rs. 200 per kg 400 300 500
Direct labour @ Rs. 50 per hour 300 350 250Other data:
Production units 50,000 40,000 25,000
Batch size units 500 250 250
Inspection time per batch hours 20 15 18
Economic order quantity (EOQ) kg 10,000 12,000 6,250
Details of factory overheads budgeted for the next year are as under:
Rs. in ‘000Procurement department costs 2,500
Batch set up costs 3,600
Quality control department costs 4,510
Utilities 4,230
Salaries of supervisors and foremen 3,525
Salaries of cleaners and maintenance staff 1,410
Miscellaneous costs 705
Total 20,480
Required:
Compute product-wise cost per unit using Activity Based Costing. - AuthorPosts
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