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Q39 kaplan
A company is changing its costing system from traditional absorption costing based on
labour hours to activity-based costing. It has overheads of $156,000 which are related to
taking material deliveries.
The delivery information about each product is below.
Product: X Y Z
Total units required 1,000 2,000 3,000
Delivery size 200 400 1,000
Total labour costs are $360,000 for 45,000 hours. Each unit of each product takes the same
number of direct hours.
Assuming that the company uses the number of deliveries as its cost driver, what will be
the effect on the costs per unit following the change from absorption costing to activity-
based costing?’ Place a tick in the boxes in the table below where appropriate.the question is since he gave us the total hour and each product take the same number of direct hours why don’t just divide the fixed cost by total hour
156000/45000
why in the answer they divided by unite number?
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