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Close Ltd produces 2 products : Product X and Product Y.
X is produced in batches of 1000 units each time.
Y is produced in batches of 5000 units each time.
15 batches each of X and Y produced each month.
Total Set up cost : $30000 each month, Close Ltd uses ABC with number of production runs as cost driver.
Set up cost per unit of Product X is ?
Are my Ans correct ?
X : (15*1000u) / 1000 u = 15
Y : (15*5000u) / 5000 u = 15
Total batches = 30
Total cost / batch = $30000/30 = $1000
OH to X : 15*$1000 = $15000
OH per unit of X : $15000/15000 = $1
Your answer is correct 🙂
(Although why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers, because they have answers 🙂 )