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Part a asks us to calculate the activity based recovery rates for each cost pool.
It was straightforward and I could easily find it.Part b asks us to calculate the total unit cost and selling price of product zt3.
I could not relate the drivers to the costs given. Please help.
BPP show all the workings in workings 4, so you are going to have to be a bit more specific about the problem you are having.
For set-ups, for example, you know that the cost per set-up is $350.
You know from the question that they are producing (100 x 60) + (60 x 50) = 9000 units of ZT3 a year, and you know that they are in production runs of 900 units. Therefore they will need 10 set-ups and the total cost will be 10 x $350 = $3,500.
This is for 9,000 units, and therefore the cost per unit = $3,500/9,000 = $0.39
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