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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 meI 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).
sir its question from kaplan kit its question no 8 and there answer is 22 decrease
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