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Question 6 of Exam Kit BPP Linacre Co 12/05 amended

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Question 6 of Exam Kit BPP Linacre Co 12/05 amended

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.
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    Posts
  • June 7, 2016 at 2:20 pm #320318
    gothrogue
    Participant
    • Topics: 20
    • Replies: 17
    • ☆

    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.

    June 7, 2016 at 3:25 pm #320375
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    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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