chineABC exerci
ACD group has three product lines P1, P2 and P3. Since its creation the company has been using a single direct labour cost percentage to assign overhead costs to products. Despite P3, a relatively new line, attracting additional business, increasing overheads costs and a loss of market share, particularly for P2, a major product, have convinced management that the costing system is in need of some development. A team spent veral weeks collecting data (e table below) for the different activities and products. For accounting period in question, given in the tables below is data on ACD's three products lines and overhead costs:
P1 P2 P3
sales
Production volume 7500 units 12,500 units 4,000 units
Direct labour cost per unit $4 $8 $6.40
Material cost per unit $18 $25 $16
Selling price per unit $47 $80 $68
Materials movements (in total) 4 25 50如何学英语口语
国内的国际高中怎么样Machine hour per unit 0.5 0.5 0.2
antismokingSet ups (in total) 1 5 10
coupProportion of engineering work 30% 20% 50%
starpadOrders packed (in total) 1 7 22
建筑师资格证怎么考Activities Overhead cost ($)
Material handling and receiving 150,000
Machine maintenance and depreciation 390,000
Set up labour 18,688
Engineering 100,000
Packing 60,000
Total 718,688
Required
ttleinto
(a) Calculate the overhead rate and the product unit costs under existing costing system.
(b) Identify for each overhead activity, an appropriate cost driver from the information supplied and then calculate the product unit costs using a system that assigns overheads on the basis of the u of activities.
(c) Comment on the results of the two costing systems in (a) and (b).
