Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n

DQ: 1<\/span><\/b><\/p>\n

SK Handicraft Center manufactures handcrafted goods. Following information is available for three different products:<\/span><\/p>\n\n\n\n\n\n\n\n

\n Particulars <\/span>$<\/span><\/p>\n<\/td>\n	\n Products <\/span>\u00ae<\/span><\/p>\n<\/td>\n	\n O<\/span><\/p>\n<\/td>\n	\n P<\/span><\/p>\n<\/td>\n	\n Q<\/span><\/p>\n<\/td>\n<\/tr>\n
\n Output<\/span><\/p>\n<\/td>\n	\n in units <\/span><\/p>\n<\/td>\n	\n 1,000<\/span><\/p>\n<\/td>\n	\n 2,000<\/span><\/p>\n<\/td>\n	\n 7,000<\/span><\/p>\n<\/td>\n<\/tr>\n
\n Materials cost per unit (MCPU)<\/span><\/p>\n<\/td>\n	\n in $ <\/span><\/p>\n<\/td>\n	\n 8<\/span><\/p>\n<\/td>\n	\n 12<\/span><\/p>\n<\/td>\n	\n 16<\/span><\/p>\n<\/td>\n<\/tr>\n
\n Labour cost per unit\u00a0\u00a0\u00a0\u00a0\u00a0 (LCPU)<\/span><\/p>\n<\/td>\n	\n in $<\/span><\/p>\n<\/td>\n	\n 12<\/span><\/p>\n<\/td>\n	\n 15<\/span><\/p>\n<\/td>\n	\n 18<\/span><\/p>\n<\/td>\n<\/tr>\n
\n Machine hour per unit (MHPU)<\/span><\/p>\n<\/td>\n	\n in hour <\/span><\/p>\n<\/td>\n	\n 4<\/span><\/p>\n<\/td>\n	\n 4<\/span><\/p>\n<\/td>\n	\n 4<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Other information:<\/span><\/p>\n Materials related cost $88,000<\/span><\/p>\n Production run cost $100,000<\/span><\/p>\n Customer\u2019s order execution $112,000<\/u><\/span><\/p>\n Required: (for three products) (a) Direct materials cost; (b) Direct labour cost; (c) Total machine hour <\/span><\/p>\n (d) Total machine hour cost; (e) Income statement under traditional costing; (f) Cost per unit <\/span><\/p>\n [Answer: (a) $8,000; $24,000 and $112,000;<\/span><\/i><\/p>\n (b) $12,000; $30,000 and $126,000;<\/span><\/i><\/p>\n (c) 4,000 hours; 8,000 hours and 28,000 hours; (d) MHR = $7.5;<\/span><\/i><\/p>\n (e) Total cost $50,000; $114,000 and $448,000;<\/span><\/i><\/p>\n (f) CPU: O = $50; P = $57 and Q = $64]<\/span><\/i><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n DQ: 2<\/span><\/b><\/p>\n Hi-life Polymers (P) Ltd manufactures slippers Following data are related to three different brands slippers:<\/span><\/p>\n\n\n\n\n\n\n \n Brands<\/span><\/p>\n<\/td>\n \n Output units<\/span><\/p>\n<\/td>\n \n Materials usage per unit<\/span><\/p>\n<\/td>\n \n Materials cost per unit (MCPU)<\/span><\/p>\n<\/td>\n \n DLH per unit<\/span><\/p>\n<\/td>\n<\/tr>\n \n X<\/span><\/p>\n<\/td>\n \n 25,000<\/span><\/p>\n<\/td>\n \n 1.5<\/span><\/p>\n<\/td>\n \n $10.00<\/span><\/p>\n<\/td>\n \n 1.0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Y<\/span><\/p>\n<\/td>\n \n 20,000<\/span><\/p>\n<\/td>\n \n 2.5<\/span><\/p>\n<\/td>\n \n $8.00<\/span><\/p>\n<\/td>\n \n 2.0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Z<\/span><\/p>\n<\/td>\n \n 30,000<\/span><\/p>\n<\/td>\n \n 2.0<\/span><\/p>\n<\/td>\n \n $12.5<\/span><\/p>\n<\/td>\n \n 1.5<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Direct wages rate per hour $15<\/span><\/p>\n Actual overhead incurred:<\/span><\/p>\n\n\n\n\n\n\n \n Materials handling cost<\/span><\/p>\n<\/td>\n \n $50,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Indirect labour<\/span><\/p>\n<\/td>\n \n $160,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Repairs and maintenance<\/span><\/p>\n<\/td>\n \n $100,000<\/span><\/u><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n $310,000<\/u><\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/u><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: (a) Value of materials; (b) Total DLH; (c) Total labour cost; (d) Income statement under traditional costing; <\/span><\/p>\n (e) Cost per unit<\/span><\/p>\n [Answer:\u00a0 (a) $375,000; $400,000 and $750,000;<\/span><\/i><\/p>\n (b) 25,000 hours; 40,000 hours and 45,000 hours; (c) LHR = $2.82<\/span><\/i><\/p>\n (d) Total cost $820,500; $11,12,800 and $15,51,900;<\/span><\/i><\/p>\n (e) CPU: X = $32.82; Y = $55.64 and Z = $51.73]<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n DQ: 3<\/span><\/b><\/p>\n ABC Company (P) Ltd has following information:<\/span><\/p>\n\n\n\n\n\n\n\n\n \n Particulars <\/span>$<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Products <\/span>\u00ae<\/span><\/p>\n<\/td>\n \n P1<\/span><\/p>\n<\/td>\n \n P2<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n The activity costs are:<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output in units <\/span><\/p>\n<\/td>\n \n 1,000<\/span><\/p>\n<\/td>\n \n 10,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Volume related<\/span><\/p>\n<\/td>\n \n $110,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine hour per unit <\/span><\/p>\n<\/td>\n \n 2<\/span><\/p>\n<\/td>\n \n 2<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Purchase related<\/span><\/p>\n<\/td>\n \n $120,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n DLH per unit <\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Set up related<\/u><\/span><\/p>\n<\/td>\n \n $210,000<\/span><\/u><\/p>\n<\/td>\n<\/tr>\n \n No. of purchase order<\/span><\/p>\n<\/td>\n \n 80<\/span><\/p>\n<\/td>\n \n 160<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Total <\/span><\/p>\n<\/td>\n \n $440,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n No. of set ups <\/span><\/p>\n<\/td>\n \n 40<\/span><\/p>\n<\/td>\n \n 60<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: \u00a0\u00a0\u00a0\u00a0 (1) (a) Cost driver rate; (b) Total overhead under ABC; <\/span><\/p>\n (2) What do you mean by traditional costing system?<\/span><\/p>\n [Answer: (1) $5; $500 and $2,100; (2) $134,000 and $306,000]<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n DQ: 4<\/span><\/b><\/p>\n Kohinoor Metal Industries manufactures different kind of auto accessories. The following data are related to four specific products:<\/span><\/p>\n\n\n\n\n\n\n\n\n \n Particulars <\/span><\/p>\n<\/td>\n \n A<\/span><\/p>\n<\/td>\n \n B<\/span><\/p>\n<\/td>\n \n C<\/span><\/p>\n<\/td>\n \n D<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output in units <\/span><\/p>\n<\/td>\n \n 500<\/span><\/p>\n<\/td>\n \n 800<\/span><\/p>\n<\/td>\n \n 1,000<\/span><\/p>\n<\/td>\n \n 1,500<\/span><\/p>\n<\/td>\n<\/tr>\n \n Prime cost <\/span><\/p>\n<\/td>\n \n $48,000<\/span><\/p>\n<\/td>\n \n $80,000<\/span><\/p>\n<\/td>\n \n $86,000<\/span><\/p>\n<\/td>\n \n $120,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine hour per unit <\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n 6<\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n 6<\/span><\/p>\n<\/td>\n<\/tr>\n \n No. of production runs<\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 7<\/span><\/p>\n<\/td>\n \n 8<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n<\/tr>\n \n No. of dispatch <\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n \n 8<\/span><\/p>\n<\/td>\n \n 12<\/span><\/p>\n<\/td>\n \n 15<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n Further information:<\/span><\/p>\n\n\n\n\n\n\n \n Short term variable cost:<\/span><\/p>\n<\/td>\n \n Machine production<\/span><\/p>\n<\/td>\n \n $99,000<\/span><\/p>\n<\/td>\n \n Machine hour <\/span><\/p>\n<\/td>\n<\/tr>\n \n Long term variable cost:<\/span><\/p>\n<\/td>\n \n Schedule cost<\/span><\/p>\n<\/td>\n \n $165,000<\/span><\/p>\n<\/td>\n \n Production runs<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Set up cost<\/span><\/p>\n<\/td>\n \n $96,000<\/span><\/p>\n<\/td>\n \n Production runs<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Dispatch of goods<\/span><\/p>\n<\/td>\n \n $137,700<\/span><\/p>\n<\/td>\n \n No. of dispatch<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: \u00a0\u00a0\u00a0\u00a0 (1) Cost driver rate; (2) Total overhead under activity based costing; (3) Cost per unit under ABC <\/span><\/p>\n [Answer: (1) $5; $5,500; $3,200 and $3,060; <\/span><\/i><\/p>\n (2) $132,100; $189,360; $212,320 and $297,900; <\/span><\/i><\/p>\n (3) $264.20; $236.73; $212.32 and $198.60]<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n DQ: 5<\/span><\/b><\/p>\n Birat Shoes Company has got order for three sizes shoes. Other information is: <\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n \n Particulars <\/span>$<\/span><\/p>\n<\/td>\n \n Products <\/span>\u00ae<\/span><\/p>\n<\/td>\n \n M<\/span><\/p>\n<\/td>\n \n N<\/span><\/p>\n<\/td>\n \n O<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output units <\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 420<\/span><\/p>\n<\/td>\n \n 280<\/span><\/p>\n<\/td>\n \n 560<\/span><\/p>\n<\/td>\n<\/tr>\n \n Standard usage of raw materials <\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 2<\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n 3<\/span><\/p>\n<\/td>\n<\/tr>\n \n Materials cost per unit<\/span><\/p>\n<\/td>\n \n (in $)<\/span><\/p>\n<\/td>\n \n $25<\/span><\/p>\n<\/td>\n \n $15<\/span><\/p>\n<\/td>\n \n $10<\/span><\/p>\n<\/td>\n<\/tr>\n \n DLH per unit <\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 2.5<\/span><\/p>\n<\/td>\n \n 2.0<\/span><\/p>\n<\/td>\n \n 1.5<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine hour per unit<\/span><\/p>\n<\/td>\n \n (hours)<\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n 3<\/span><\/p>\n<\/td>\n<\/tr>\n \n Selling price per unit<\/span><\/p>\n<\/td>\n \n (in $)<\/span><\/p>\n<\/td>\n \n $430<\/span><\/p>\n<\/td>\n \n $400<\/span><\/p>\n<\/td>\n \n $300<\/span><\/p>\n<\/td>\n<\/tr>\n \n Production runs <\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 6<\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n 8<\/span><\/p>\n<\/td>\n<\/tr>\n \n Order executed <\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 21<\/span><\/p>\n<\/td>\n \n 14<\/span><\/p>\n<\/td>\n \n 28<\/span><\/p>\n<\/td>\n<\/tr>\n \n Requisition raised <\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n \n 15<\/span><\/p>\n<\/td>\n \n 20<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n DLH $10 per labour hour <\/span><\/p>\n \u00a0<\/span><\/p>\n Cost driver and expenses:<\/span><\/p>\n\n\n\n\n\n\n\n\n\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Amount<\/span><\/p>\n<\/td>\n \n Cost driver <\/span><\/p>\n<\/td>\n<\/tr>\n \n Volume related cost<\/span><\/p>\n<\/td>\n \n 36,750<\/span><\/p>\n<\/td>\n \n Machine hour <\/span><\/p>\n<\/td>\n<\/tr>\n \n Set up cost<\/span><\/p>\n<\/td>\n \n 101,430<\/span><\/p>\n<\/td>\n \n No. of production runs<\/span><\/p>\n<\/td>\n<\/tr>\n \n Store receiving cost <\/span><\/p>\n<\/td>\n \n 79,785<\/span><\/p>\n<\/td>\n \n No. of requisition raised <\/span><\/p>\n<\/td>\n<\/tr>\n \n Quantity control cost <\/span><\/p>\n<\/td>\n \n 36,000<\/span><\/p>\n<\/td>\n \n No. of production runs <\/span><\/p>\n<\/td>\n<\/tr>\n \n Materials handling and dispatch <\/span><\/p>\n<\/td>\n \n 97,650<\/span><\/p>\n<\/td>\n \n No. of order executive <\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n $351,615<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: (a) Total cost and cost per unit under conventional costing based on labour hour rate<\/span><\/p>\n (b) Cost driver rate; (c) Total cost and cost per unit under ABC<\/span><\/p>\n [Answer: (a) M = $182,196 and $433.80; <\/span><\/i><\/p>\n N = $102,771 and $367.04; O = $145,757 and $260.28;<\/span><\/i><\/p>\n (b) $7.5; $5,635; $1,773; $2,000 and $1,550;<\/span><\/i><\/p>\n (c) M = $143,340 and $341.29; N = $109,635 and $391.55; <\/span><\/i><\/p>\n O = $177,740 and $317.39]<\/span><\/i><\/p>\n \u00a0<\/span><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n DQ: 6<\/span><\/b><\/p>\n AP Manufacturing Company has a single production process. Three products P, Q and Rare produced by workers the wage rate per hour is $4. The budget information has been obtained for the year is as follows:<\/span><\/p>\n\n\n\n\n\n\n\n \n Product<\/span><\/p>\n<\/td>\n \n Production\u00a0 units<\/span><\/p>\n<\/td>\n \n Material<\/span><\/p>\n<\/td>\n \n Materials\u00a0 cost<\/span><\/p>\n<\/td>\n \n Labour hours<\/span><\/p>\n<\/td>\n \n Machine hours<\/span><\/p>\n<\/td>\n \n Batches<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Per unit<\/span><\/p>\n<\/td>\n \n Per unit<\/span><\/p>\n<\/td>\n \n Per unit<\/span><\/p>\n<\/td>\n \n Per unit<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n P<\/span><\/p>\n<\/td>\n \n 2,000<\/span><\/p>\n<\/td>\n \n 2 units<\/span><\/p>\n<\/td>\n \n $3<\/span><\/p>\n<\/td>\n \n 0.50 hour<\/span><\/p>\n<\/td>\n \n 1.00 hour<\/span><\/p>\n<\/td>\n \n 6<\/span><\/p>\n<\/td>\n<\/tr>\n \n Q<\/span><\/p>\n<\/td>\n \n 1,000<\/span><\/p>\n<\/td>\n \n 3 units<\/span><\/p>\n<\/td>\n \n $5<\/span><\/p>\n<\/td>\n \n 0.25 hour<\/span><\/p>\n<\/td>\n \n 0.25 hour<\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n<\/tr>\n \n R<\/span><\/p>\n<\/td>\n \n 500<\/span><\/p>\n<\/td>\n \n 4 units<\/span><\/p>\n<\/td>\n \n $2<\/span><\/p>\n<\/td>\n \n 1.00 hour<\/span><\/p>\n<\/td>\n \n 1.50 hour<\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n The overhead cost and related cost drives are:<\/span><\/p>\n\n\n\n\n\n\n \n Overhead<\/span><\/p>\n<\/td>\n \n Cost Drives<\/span><\/p>\n<\/td>\n \n Amount (in $)<\/span><\/p>\n<\/td>\n<\/tr>\n \n Material receipt and inspections<\/span><\/p>\n<\/td>\n \n No of batches<\/span><\/p>\n<\/td>\n \n 30,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Material handing<\/span><\/p>\n<\/td>\n \n Quantity of materials<\/span><\/p>\n<\/td>\n \n 18,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Short term variable cost<\/span><\/p>\n<\/td>\n \n No of machine hours<\/span><\/p>\n<\/td>\n \n 6,000<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: Using activity based costing find out:<\/span><\/p>\n (1) Cost driver rate; (2) Total cost for each product; (3) Cost per unit<\/span><\/p>\n Answers: (1) CDR = $2,000; $2; $2; <\/span><\/i><\/p>\n (2) Total cost = $34,000; $22,500; $16,500; <\/span><\/i><\/p>\n (3) $17; $22.50; $33]<\/span><\/i><\/p>\n Materials per unit is applied for Quantity not for direct materials<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n DQ: 7<\/span><\/b><\/p>\n ABC Company manufactures two products namely X and Y. Data for the period is as follows:<\/span><\/p>\n\n\n\n\n\n\n\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Product X<\/span><\/p>\n<\/td>\n \n Product Y<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output in units<\/span><\/p>\n<\/td>\n \n 2,000<\/span><\/p>\n<\/td>\n \n 3,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine hour unit<\/span><\/p>\n<\/td>\n \n 2 hours<\/span><\/p>\n<\/td>\n \n 1 hour<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Labour hour per unit<\/span><\/p>\n<\/td>\n \n 2 hours<\/span><\/p>\n<\/td>\n \n 3 hours<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Production run<\/span><\/p>\n<\/td>\n \n 7<\/span><\/p>\n<\/td>\n \n 3<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n Total production overhead recorded and cost-driver fixed by cost accounting department is analyzed as:<\/span><\/p>\n\n\n\n\n\n\n \n Cost<\/span><\/p>\n<\/td>\n \n Cost Drives<\/span><\/p>\n<\/td>\n \n Amount\u00a0 ($)<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Set up cost<\/span><\/p>\n<\/td>\n \n Production runs<\/span><\/p>\n<\/td>\n \n 20,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine department<\/span><\/p>\n<\/td>\n \n Machine hours<\/span><\/p>\n<\/td>\n \n 14,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Scheduling\u00a0 cost<\/span><\/p>\n<\/td>\n \n Production runs<\/span><\/p>\n<\/td>\n \n 18,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: \u00a0\u00a0\u00a0\u00a0 (a) Total overhead and overhead rate by using labour hour rate; (b) Cost driver rate<\/span><\/p>\n (c) Total overhead and overhead rate under activity based costing<\/span><\/p>\n Answer: (1) Total overhead: X = $16,000; Y = $36,000; <\/span><\/i><\/p>\n ORPU:\u00a0 X = $8.00, Y= $12.00;<\/span><\/i><\/p>\n (2) Total overhead: X = $34,600; Y = $17,400; <\/span><\/i><\/p>\n ORPU: X = $17.30, Y = $5.80;<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n DQ: 8<\/span><\/b><\/p>\n A Company produces two types of products. The president of the company recently decided to change from a volume based costing system to an activity based cost system. To assess the effect of the change, the following data have been gathered:<\/span><\/p>\n\n\n\n\n\n \n Products<\/span><\/p>\n<\/td>\n \n Units<\/span><\/p>\n<\/td>\n \n Machine hours<\/span><\/p>\n<\/td>\n \n Production runs<\/span><\/p>\n<\/td>\n \n Prime cost<\/span><\/p>\n<\/td>\n \n Material component<\/span><\/p>\n<\/td>\n<\/tr>\n \n A<\/span><\/p>\n B<\/span><\/p>\n<\/td>\n \n 3,000<\/span><\/p>\n 2,000<\/span><\/p>\n<\/td>\n \n 9,000<\/span><\/p>\n 4,000<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n 5<\/span><\/p>\n<\/td>\n \n 10,000<\/span><\/p>\n 8,000<\/span><\/p>\n<\/td>\n \n 6,000<\/span><\/p>\n 8,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Total <\/span><\/p>\n<\/td>\n \n 5,000<\/span><\/p>\n<\/td>\n \n 13,000<\/span><\/p>\n<\/td>\n \n 15<\/span><\/p>\n<\/td>\n \n 18,000<\/span><\/p>\n<\/td>\n \n 14,000<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n The overhead cost and cost drives are as follows:<\/span><\/p>\n\n\n\n\n\n\n \n Cost<\/span><\/p>\n<\/td>\n \n Cost drives<\/span><\/p>\n<\/td>\n \n Amount ($)<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine related activities<\/span><\/p>\n<\/td>\n \n Machine hours<\/span><\/p>\n<\/td>\n \n 39,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Set up cost<\/span><\/p>\n<\/td>\n \n Production runs<\/span><\/p>\n<\/td>\n \n 30,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Material handling costs<\/span><\/p>\n<\/td>\n \n No. of material components<\/span><\/p>\n<\/td>\n \n 28,000<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: \u00a0\u00a0\u00a0\u00a0 (1) Cost drives rate for each item by using activity- based costing\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/p>\n (2) Total cost and cost per unit of each product by using cost- driver rate<\/span><\/p>\n [Answer: (1) Cost driver rate = $3, $2,000, $2;\u00a0\u00a0 <\/span><\/i><\/p>\n (2) Total cost: A = $69,000; B = $46,000; <\/span><\/i><\/p>\n OPU: A = $23; B = $23;<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n \u00a0<\/span><\/b><\/p>\n Analytical Questions <\/span><\/b><\/h3>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n AQ: 1<\/span><\/b><\/p>\n A Manufacturing Company manufactures three products namely A, B and C. The details regarding product and cost are summarized in the following table:<\/span><\/p>\n\n\n\n\n\n\n\n \n Product<\/span><\/p>\n<\/td>\n \n Output <\/span><\/p>\n<\/td>\n \n Direct labour <\/span><\/p>\n<\/td>\n \n Machine <\/span><\/p>\n<\/td>\n \n Materials cost<\/span><\/p>\n<\/td>\n \n Production run<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n in units<\/span><\/p>\n<\/td>\n \n hour\/unit<\/span><\/p>\n<\/td>\n \n hour\/unit<\/span><\/p>\n<\/td>\n \n per unit<\/span><\/p>\n<\/td>\n \n per unit<\/span><\/p>\n<\/td>\n<\/tr>\n \n A<\/span><\/p>\n<\/td>\n \n 2,000<\/span><\/p>\n<\/td>\n \n 2.5<\/span><\/p>\n<\/td>\n \n 2.0<\/span><\/p>\n<\/td>\n \n $10<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n<\/tr>\n \n B<\/span><\/p>\n<\/td>\n \n 5,000<\/span><\/p>\n<\/td>\n \n 4.0<\/span><\/p>\n<\/td>\n \n 2.0<\/span><\/p>\n<\/td>\n \n $12<\/span><\/p>\n<\/td>\n \n 15<\/span><\/p>\n<\/td>\n<\/tr>\n \n C<\/span><\/p>\n<\/td>\n \n 10,000<\/span><\/p>\n<\/td>\n \n 5.0<\/span><\/p>\n<\/td>\n \n 2.0<\/span><\/p>\n<\/td>\n \n $15<\/span><\/p>\n<\/td>\n \n 20<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Further information:<\/span><\/p>\n Direct labour cost per hour is $4<\/span><\/p>\n \u00a0<\/span><\/p>\n\n\n\n\n\n\n\n\n \n Overhead cost:<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Cost driver tools<\/span><\/p>\n<\/td>\n<\/tr>\n \n Repairs and maintenance<\/span><\/p>\n<\/td>\n \n $102,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Indirect labour<\/span><\/p>\n<\/td>\n \n DLH<\/span><\/p>\n<\/td>\n<\/tr>\n \n Setup cost<\/span><\/p>\n<\/td>\n \n $90,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Scheduling cost<\/span><\/p>\n<\/td>\n \n Production run<\/span><\/p>\n<\/td>\n<\/tr>\n \n Scheduling costs<\/span><\/p>\n<\/td>\n \n $45,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n Set up<\/span><\/p>\n<\/td>\n \n Production run<\/span><\/p>\n<\/td>\n<\/tr>\n \n Indirect labour<\/u><\/span><\/p>\n<\/td>\n \n $138,000<\/span><\/u><\/p>\n<\/td>\n \n \u00a0<\/span><\/u><\/p>\n<\/td>\n \n \u00a0<\/span><\/u><\/p>\n<\/td>\n \n Maintenance<\/span><\/p>\n<\/td>\n \n Machine hour<\/span><\/p>\n<\/td>\n<\/tr>\n \n Total<\/span><\/p>\n<\/td>\n \n $375,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: \u00a0\u00a0\u00a0\u00a0 (a) Total cost and cost per unit under traditional costing system by using DLH<\/span><\/p>\n (b) Total cost and cost absorption statement under ABC system <\/span><\/p>\n \u00a0[Answers: (a) Total cost: A = $65,000; B = $240,000; C = $600,000; <\/span><\/i><\/p>\n CPU: A = 32.50; B = 48; C =\u00a0 60;<\/span><\/i><\/p>\n (b) Total cost: A = $91,200; B = $251,800; C = $562,000; <\/span><\/i><\/p>\n CPU: A = 45.60; B =50.36; C = 56.20]<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n AQ: 2<\/span><\/b><\/p>\n A company manufacturing\u2019s three products namely X, Y and Z using the same plant and process. The following information relates to a production period.<\/span><\/p>\n\n\n\n\n\n\n \n Product<\/span><\/p>\n<\/td>\n \n Output in units<\/span><\/p>\n<\/td>\n \n Material cost per unit<\/span><\/p>\n<\/td>\n \n Direct labour cost per unit<\/span><\/p>\n<\/td>\n \n Machine hour per unit<\/span><\/p>\n<\/td>\n<\/tr>\n \n X<\/span><\/p>\n<\/td>\n \n 100<\/span><\/p>\n<\/td>\n \n $100<\/span><\/p>\n<\/td>\n \n $6<\/span><\/p>\n<\/td>\n \n \u00a02.0 hours<\/span><\/p>\n<\/td>\n<\/tr>\n \n Y<\/span><\/p>\n<\/td>\n \n 200<\/span><\/p>\n<\/td>\n \n $50<\/span><\/p>\n<\/td>\n \n $3<\/span><\/p>\n<\/td>\n \n \u00a01.0 hour<\/span><\/p>\n<\/td>\n<\/tr>\n \n Z<\/span><\/p>\n<\/td>\n \n 500<\/span><\/p>\n<\/td>\n \n $40<\/span><\/p>\n<\/td>\n \n $5<\/span><\/p>\n<\/td>\n \n \u00a01.2 hours<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n The production overhead and cost drives are:<\/span><\/p>\n\n\n\n\n\n\n\n \n Overhead<\/span><\/p>\n<\/td>\n \n Cost drives<\/span><\/p>\n<\/td>\n \n Amount<\/span><\/p>\n<\/td>\n<\/tr>\n \n Set up costs<\/span><\/p>\n<\/td>\n \n No. of production runs<\/span><\/p>\n<\/td>\n \n 64,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Stores receiving<\/span><\/p>\n<\/td>\n \n Requisition raised<\/span><\/p>\n<\/td>\n \n 8,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Inspection and control<\/span><\/p>\n<\/td>\n \n No. of production runs<\/span><\/p>\n<\/td>\n \n 16,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Material handling and dispatch<\/span><\/p>\n<\/td>\n \n Orders executed<\/span><\/p>\n<\/td>\n \n 16,000<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Additional information:<\/span><\/p>\n a. The three products were produced in a production run of 25 units each.<\/span><\/p>\n b. The requisition raised for the period in the stores for product X, Year and Z were 10, 10 and 20 respectively.<\/span><\/p>\n c. The number of order being in a batch of 20 units for each product and number of total order executed was 40<\/span><\/p>\n Required: Statement total cost and cost per unit for each product by using<\/span><\/p>\n (1) Conventional absorption costing on the basis of machine hours<\/span><\/p>\n (2) An activity based costing using suitable cost drives<\/span><\/p>\n [Answer: (1) Total cost:\u00a0 $31,400; $31,400; $84,900; <\/span><\/i><\/p>\n CPU $314; $157; $169.80;<\/span><\/i><\/p>\n \u00a0(2) Total cost $24,600; $36,600; $86,500; <\/span><\/i><\/p>\n CPU $246; $183; $173;<\/span><\/i><\/p>\n Production runs = Output \u00f725 units each batch; <\/span><\/i><\/p>\n Order executed = Output \u00f7 20 units each batch]<\/span><\/i><\/p>\n \u00a0<\/span><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n AQ: 3<\/span><\/b><\/p>\n ABC Manufacturing Company has following information:<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n \n Particulars <\/span>\u2193<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Products <\/span>\u00ae<\/span><\/p>\n<\/td>\n \n A<\/span><\/p>\n<\/td>\n \n B<\/span><\/p>\n<\/td>\n \n C<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output in kg <\/span><\/p>\n<\/td>\n \n 500 units<\/span><\/p>\n<\/td>\n \n 1,000 units<\/span><\/p>\n<\/td>\n \n 2,000 units<\/span><\/p>\n<\/td>\n<\/tr>\n \n Raw materials usage per unit <\/span><\/p>\n<\/td>\n \n 3 units<\/span><\/p>\n<\/td>\n \n 2 units<\/span><\/p>\n<\/td>\n \n 1 unit<\/span><\/p>\n<\/td>\n<\/tr>\n \n Raw materials cost per unit <\/span><\/p>\n<\/td>\n \n $20<\/span><\/p>\n<\/td>\n \n $16<\/span><\/p>\n<\/td>\n \n $40<\/span><\/p>\n<\/td>\n<\/tr>\n \n Labour hour per unit <\/span><\/p>\n<\/td>\n \n 1 hour<\/span><\/p>\n<\/td>\n \n 2 hours<\/span><\/p>\n<\/td>\n \n 0.5 hour<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine hours per unit <\/span><\/p>\n<\/td>\n \n 0.5 hour<\/span><\/p>\n<\/td>\n \n 1 hour<\/span><\/p>\n<\/td>\n \n 0.5 hour<\/span><\/p>\n<\/td>\n<\/tr>\n \n No. of batches <\/span><\/p>\n<\/td>\n \n 3<\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 7<\/span><\/p>\n<\/td>\n<\/tr>\n \n Production runs <\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n \n 20<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n Skilled labour rate per hour $40<\/span><\/p>\n Cost and cost drivers <\/span><\/p>\n\n\n\n\n\n\n\n\n\n \n Overhead <\/span><\/p>\n<\/td>\n \n Amount<\/span><\/p>\n<\/td>\n \n Cost drivers <\/span><\/p>\n<\/td>\n<\/tr>\n \n Materials receipt<\/span><\/p>\n<\/td>\n \n 15,000<\/span><\/p>\n<\/td>\n \n No. batches <\/span><\/p>\n<\/td>\n<\/tr>\n \n Materials handling<\/span><\/p>\n<\/td>\n \n 8,250<\/span><\/p>\n<\/td>\n \n Quantity of materials <\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine expenses <\/span><\/p>\n<\/td>\n \n 29,250<\/span><\/p>\n<\/td>\n \n Machine hours <\/span><\/p>\n<\/td>\n<\/tr>\n \n Indirect labour <\/span><\/p>\n<\/td>\n \n 10,500<\/span><\/p>\n<\/td>\n \n Direct labour hours <\/span><\/p>\n<\/td>\n<\/tr>\n \n Set up cost <\/span><\/p>\n<\/td>\n \n 7,000<\/span><\/p>\n<\/td>\n \n Production runs <\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 70,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: (a) Total cost and cost per unit based on labour and volume<\/span><\/p>\n (b) Cost driver rate; (c) Total cost and cost per unit based on ABC<\/span><\/p>\n [Answer:\u00a0 (a) Total cost: A = $60,000; B = $152,000; C = $140,000;<\/span><\/i><\/p>\n CPU: A = $120; B = $152; C = $70;<\/span><\/i><\/p>\n (b) CDR: $1,000; $1.50; $13; $3; $200;<\/span><\/i><\/p>\n (c) Total cost: A = $61,000; B = $141,000; C = $150,000;<\/span><\/i><\/p>\n CPU: A = $122; B = $141; C = $75]<\/span><\/i><\/p>\n \u00a0<\/span><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n AQ: 4<\/span><\/b><\/p>\n ABC Publication (P) Ltd published different kind of books. Following data is related to three books:<\/span><\/p>\n\n\n\n\n\n\n\n \n Subjects <\/span><\/p>\n<\/td>\n \n Copies (Output)<\/span><\/p>\n<\/td>\n \n Paper per unit<\/span><\/p>\n<\/td>\n \n Printing per unit<\/span><\/p>\n<\/td>\n \n Binding and cutting<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n (machine hour per unit)<\/span><\/p>\n<\/td>\n<\/tr>\n \n Economics <\/span><\/p>\n<\/td>\n \n 2,000<\/span><\/p>\n<\/td>\n \n 50<\/span><\/p>\n<\/td>\n \n 20<\/span><\/p>\n<\/td>\n \n 0.25<\/span><\/p>\n<\/td>\n<\/tr>\n \n English <\/span><\/p>\n<\/td>\n \n 3,000<\/span><\/p>\n<\/td>\n \n 40<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n \n 0.20<\/span><\/p>\n<\/td>\n<\/tr>\n \n Nepali <\/span><\/p>\n<\/td>\n \n 5,000<\/span><\/p>\n<\/td>\n \n 30<\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 0.15<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n Cost and cost drivers <\/span><\/p>\n\n\n\n\n\n\n\n \n Overhead <\/span><\/p>\n<\/td>\n \n Amount<\/span><\/p>\n<\/td>\n \n Cost drivers <\/span><\/p>\n<\/td>\n<\/tr>\n \n Set up cost <\/span><\/p>\n<\/td>\n \n 20,000<\/span><\/p>\n<\/td>\n \n Production runs <\/span><\/p>\n<\/td>\n<\/tr>\n \n Store receiving \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/p>\n<\/td>\n \n 10,000<\/span><\/p>\n<\/td>\n \n Requisition raised <\/span><\/p>\n<\/td>\n<\/tr>\n \n Inspection and control<\/span><\/p>\n<\/td>\n \n 15,000<\/span><\/p>\n<\/td>\n \n Production runs<\/span><\/p>\n<\/td>\n<\/tr>\n \n Handling and dispatch <\/span><\/p>\n<\/td>\n \n 20,500<\/span><\/p>\n<\/td>\n \n Order executed <\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Advance information:<\/span><\/p>\n Direct expenses 100% of printing (labour)<\/span><\/p>\n Production runs in 500 units each subject<\/span><\/p>\n Requisition raised Economics, English and Nepali in 200 units, 150 units and 100 units respectively<\/span><\/p>\n Materials dispatched in 50 units each subject<\/span><\/p>\n Required: \u00a0\u00a0\u00a0\u00a0 (a) Cost statement of absorption costing based on machine hours<\/span><\/p>\n (b) Cost driver rate; (c) Cost statement based on ABC<\/span><\/p>\n [Answer:\u00a0 (a) Total cost: Eco = $197,700; Eng = $201,240; Nepali = $226,550;<\/span><\/i><\/p>\n CPU: Eco = $98,85; Eng = $67.08; Nepali = $45.31;<\/span><\/i><\/p>\n (b) CDR: $1,000; $22.22; $750; $102.50;<\/span><\/i><\/p>\n (c) Total cost: Eco = $195,544; Eng = $199,983; Nepali = $229,973;<\/span><\/i><\/p>\n CPU: Eco = $97.77; Eng = $66.66; Nepali = $45.99]<\/span><\/i><\/p>\n *Paper = direct materials; printing = direct labour]<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n AQ: 5<\/span><\/b><\/p>\n XYZ Manufacturing Company has following information:<\/span><\/p>\n\n\n\n\n\n\n\n\n\n \n Particulars <\/span>\u2193<\/span> Products <\/span>\u00ae<\/span><\/p>\n<\/td>\n \n A<\/span><\/p>\n<\/td>\n \n B<\/span><\/p>\n<\/td>\n \n C<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output in kg <\/span><\/p>\n<\/td>\n \n 1,500 kg<\/span><\/p>\n<\/td>\n \n 900 kg<\/span><\/p>\n<\/td>\n \n 600 kg<\/span><\/p>\n<\/td>\n<\/tr>\n \n Raw materials usage per kg<\/span><\/p>\n<\/td>\n \n 1.5 units<\/span><\/p>\n<\/td>\n \n 3 units<\/span><\/p>\n<\/td>\n \n 4.5 unit<\/span><\/p>\n<\/td>\n<\/tr>\n \n Raw materials cost per kg <\/span><\/p>\n<\/td>\n \n $15<\/span><\/p>\n<\/td>\n \n $7.5<\/span><\/p>\n<\/td>\n \n $30<\/span><\/p>\n<\/td>\n<\/tr>\n \n Labour hour per kg<\/span><\/p>\n<\/td>\n \n 0.60 hour<\/span><\/p>\n<\/td>\n \n 0.50 hours<\/span><\/p>\n<\/td>\n \n 0.75 hour<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine hours per kg<\/span><\/p>\n<\/td>\n \n 0.75 hour<\/span><\/p>\n<\/td>\n \n 1.5 hour<\/span><\/p>\n<\/td>\n \n 1.75 hour<\/span><\/p>\n<\/td>\n<\/tr>\n \n Production runs <\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 3<\/span><\/p>\n<\/td>\n \n 2<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Other information:<\/span><\/p>\n a.\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>Machine overhead rate $28 per hours <\/span><\/p>\n b.\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>Skilled labour rate per hour $30<\/span><\/p>\n c.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>Materials procurement in per 300 units of each output <\/span><\/p>\n d.\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>No. of inspection in per 100 units of each output <\/span><\/p>\n Cost and cost drivers <\/span><\/p>\n\n\n\n\n\n\n\n \n Overhead <\/span><\/p>\n<\/td>\n \n % of expenses<\/span><\/p>\n<\/td>\n \n Cost drivers <\/span><\/p>\n<\/td>\n<\/tr>\n \n Schedule cost <\/span><\/p>\n<\/td>\n \n 10%<\/span><\/p>\n<\/td>\n \n Production runs <\/span><\/p>\n<\/td>\n<\/tr>\n \n Materials procurement <\/span><\/p>\n<\/td>\n \n 35%<\/span><\/p>\n<\/td>\n \n No. of materials procurement<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine expenses <\/span><\/p>\n<\/td>\n \n 40%<\/span><\/p>\n<\/td>\n \n Machine hours <\/span><\/p>\n<\/td>\n<\/tr>\n \n Inspection\u00a0 <\/span><\/p>\n<\/td>\n \n 15%<\/span><\/p>\n<\/td>\n \n No. of inspection <\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: (a) Total overhead; (b) Allocation of overhead; <\/span><\/p>\n (c) Cost statement under traditional costing based on machine hours (d) Cost driver rate; <\/span><\/p>\n (e) Cost statement under ABC\u00a0 <\/span><\/p>\n [Answer:\u00a0 (a) Total expenses $98,700 <\/span><\/i><\/p>\n (b) Expenses allocation: $9,870; $34,545; $39,480; $14,805;<\/span><\/i><\/p>\n (c) Total cost: A = $92,250; B = $71,550; C = $123,900;<\/span><\/i><\/p>\n CPU: A = $61.50; B = $79.50; C = $206.50;<\/span><\/i><\/p>\n (d) CDR: $1,000; $22.22; $750; $102.50;<\/span><\/i><\/p>\n (e) Total cost: A = $102,961; B = $66,937; C = $118,102;<\/span><\/i><\/p>\n CPU: A = $68.64; B = $74.04; C = $196.84] <\/span><\/i><\/p>\n *Calculation is nearest rupees]<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n AQ: 6<\/span><\/b><\/p>\n The traditional cost statement based on machine hours is given by JP Manufacturing Company:<\/span><\/p>\n Cost Statement under Traditional Costing<\/span><\/b><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n \n Particulars <\/span><\/p>\n<\/td>\n \n Products<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n A = 5,000<\/span><\/p>\n<\/td>\n \n B = 6,000<\/span><\/p>\n<\/td>\n \n C = 7,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Direct materials \u00a0\u00a0\u00a0\u00a0 [Output x RMPU]<\/span><\/p>\n<\/td>\n \n 75,000<\/span><\/p>\n<\/td>\n \n 120,000<\/span><\/p>\n<\/td>\n \n 175,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Direct labour \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 [@ $20]<\/span><\/p>\n<\/td>\n \n 100,000<\/span><\/p>\n<\/td>\n \n 120,000<\/span><\/p>\n<\/td>\n \n 140,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Prime cost<\/span><\/p>\n<\/td>\n \n 175,000<\/span><\/p>\n<\/td>\n \n 240,000<\/span><\/p>\n<\/td>\n \n 315,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Add: Overhead (based on machine\u00a0 hour):<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine expenses (MH x $15)<\/span><\/p>\n<\/td>\n \n 37,500<\/span><\/p>\n<\/td>\n \n 67,500<\/span><\/p>\n<\/td>\n \n 105,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Total cost <\/span><\/p>\n<\/td>\n \n 212500<\/span><\/p>\n<\/td>\n \n 307500<\/span><\/p>\n<\/td>\n \n 420000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output <\/span><\/p>\n<\/td>\n \n 5,000<\/span><\/p>\n<\/td>\n \n 6,000<\/span><\/p>\n<\/td>\n \n 7,000<\/span><\/p>\n<\/td>\n<\/tr>\n \n Cost per units \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 = Total cost \u00f7 Output<\/span><\/p>\n<\/td>\n \n 42.50<\/span><\/p>\n<\/td>\n \n 51.25<\/span><\/p>\n<\/td>\n \n 60.00<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n The company sales whole products at 50% profit on cost. The company wants to change traditional based costing to activity based costing. Other data is given below:<\/span><\/p>\n\n\n\n\n\n\n \n Particulars <\/span><\/p>\n<\/td>\n \n A<\/span><\/p>\n<\/td>\n \n B<\/span><\/p>\n<\/td>\n \n C<\/span><\/p>\n<\/td>\n<\/tr>\n \n No. of order<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n \n 14<\/span><\/p>\n<\/td>\n \n 16<\/span><\/p>\n<\/td>\n<\/tr>\n \n No. of set up<\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 7<\/span><\/p>\n<\/td>\n \n 10<\/span><\/p>\n<\/td>\n<\/tr>\n \n Area occupied (square feet)<\/span><\/p>\n<\/td>\n \n 400<\/span><\/p>\n<\/td>\n \n 1,000<\/span><\/p>\n<\/td>\n \n 1,500<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/span><\/p>\n Cost and cost drivers are: <\/span><\/p>\n\n\n\n\n\n\n\n \n Overhead <\/span><\/p>\n<\/td>\n \n Amount<\/span><\/p>\n<\/td>\n \n Cost drivers <\/span><\/p>\n<\/td>\n<\/tr>\n \n Order process<\/span><\/p>\n<\/td>\n \n 50,000<\/span><\/p>\n<\/td>\n \n No. of order <\/span><\/p>\n<\/td>\n<\/tr>\n \n Production control <\/span><\/p>\n<\/td>\n \n 29,900<\/span><\/p>\n<\/td>\n \n No. of set up<\/span><\/p>\n<\/td>\n<\/tr>\n \n Rent and rate <\/span><\/p>\n<\/td>\n \n 72,500<\/span><\/p>\n<\/td>\n \n Area occupied <\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine expenses\u00a0 <\/span><\/p>\n<\/td>\n \n 57,600<\/span><\/p>\n<\/td>\n \n Machine hours\u00a0 <\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: \u00a0\u00a0\u00a0\u00a0 (1) Cost driver rate; (2) Cost statement under ABC showing total cost and cost per unit.<\/span><\/p>\n (3) Selling price per unit under traditional costing and ABC.<\/span><\/p>\n [Answer: (1) CDR = $1,250; $1,359.09; $25; $3.20;<\/span><\/i><\/p>\n (2) Total cost: A = $220,295; $311,214; $408,491; <\/span><\/i><\/p>\n CPU: A = $44.06; B = $51.87; C = $58.36<\/span><\/i><\/p>\n (3) SPPU: TC: A = $63.75; B = $76.88; C = $90.00;<\/span><\/i><\/p>\n ABC: A = $66.09; B = $77.81; C = $87.54]<\/span><\/i><\/p>\n * Machine hours = A = 0.50; B = 0.75; C = 1.00;<\/span><\/i><\/p>\n Labour hours = Direct labour \u00f7 $20; A = 5,000; B = 6,000; C = 7,000]<\/span><\/i><\/p>\n \u00a0<\/span><\/b><\/p>\n Here, Amount = Rs = $ = \u00a3 = \u20ac = <\/span>\u20b9<\/span> = Af = <\/span>\u09f3 <\/span>= Nu = Rf = <\/span>\u0dbb\u0dd4<\/span> = Br = P = Birr = Currency of your country<\/span>\u00a0 <\/span><\/p>\n AQ: 7<\/span><\/b><\/p>\n High-Light Polymers (P) Ltd manufactures kids school shoes. The following data is related to four kinds of shoes for the month of January:<\/span><\/p>\n\n\n\n\n\n\n\n\n \n Particulars <\/span>\u2193<\/span><\/p>\n<\/td>\n \n Products <\/span>\u00ae<\/span><\/p>\n<\/td>\n \n A<\/span><\/p>\n<\/td>\n \n B<\/span><\/p>\n<\/td>\n \n C<\/span><\/p>\n<\/td>\n \n D<\/span><\/p>\n<\/td>\n<\/tr>\n \n Output<\/span><\/p>\n<\/td>\n \n [units] <\/span><\/p>\n<\/td>\n \n 120<\/span><\/p>\n<\/td>\n \n 100<\/span><\/p>\n<\/td>\n \n 80<\/span><\/p>\n<\/td>\n \n 120<\/span><\/p>\n<\/td>\n<\/tr>\n \n Direct materials<\/span><\/p>\n<\/td>\n \n [$ per unit] <\/span><\/p>\n<\/td>\n \n 40<\/span><\/p>\n<\/td>\n \n 50<\/span><\/p>\n<\/td>\n \n 30<\/span><\/p>\n<\/td>\n \n 60<\/span><\/p>\n<\/td>\n<\/tr>\n \n Direct labour<\/span><\/p>\n<\/td>\n \n [$ per unit] <\/span><\/p>\n<\/td>\n \n 28<\/span><\/p>\n<\/td>\n \n 21<\/span><\/p>\n<\/td>\n \n 14<\/span><\/p>\n<\/td>\n \n 21<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine hours<\/span><\/p>\n<\/td>\n \n [per unit] <\/span><\/p>\n<\/td>\n \n 4<\/span><\/p>\n<\/td>\n \n 5<\/span><\/p>\n<\/td>\n \n 2<\/span><\/p>\n<\/td>\n \n 3<\/span><\/p>\n<\/td>\n<\/tr>\n \n Selling price per unit<\/span><\/p>\n<\/td>\n \n [$]<\/span><\/p>\n<\/td>\n \n 180<\/span><\/p>\n<\/td>\n \n 200<\/span><\/p>\n<\/td>\n \n 100<\/span><\/p>\n<\/td>\n \n 180<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Other information:<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>Production produced (runs) in 20 units per batch and order executed (sold) in 10 units per pack.<\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>The number of requisition raised in 20 for each product. <\/span><\/p>\n \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>No. of component of materials A, B C and D in 12, 10, 8 and 12 respectively. <\/span><\/p>\n \u00a0<\/span><\/p>\n Overhead and cost drivers:<\/span><\/p>\n\n\n\n\n\n\n\n\n\n \n Overhead <\/span><\/p>\n<\/td>\n \n Cost drivers <\/span><\/p>\n<\/td>\n \n Amount<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Set up cost<\/span><\/p>\n<\/td>\n \n Production runs <\/span><\/p>\n<\/td>\n \n 5,040<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Store receiving<\/span><\/p>\n<\/td>\n \n Requisition raised <\/span><\/p>\n<\/td>\n \n 3,660<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Inspection and control <\/span><\/p>\n<\/td>\n \n No. of components <\/span><\/p>\n<\/td>\n \n 2,100<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Materials handling <\/span><\/p>\n<\/td>\n \n Order executed<\/span><\/p>\n<\/td>\n \n 4,200<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n Machine expenses\u00a0\u00a0 <\/span><\/p>\n<\/td>\n \n Machine hours\u00a0 <\/span><\/p>\n<\/td>\n \n 15,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n \n 30,000<\/span><\/p>\n<\/td>\n \n \u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Required: (Total cost, cost per unit and profit or loss under)<\/span><\/p>\n (1) Total cost, cost per unit and profit or loss under traditional costing based machine hours <\/span><\/p>\n (2) Total cost, cost per unit and profit or loss under activity based costing.\u00a0 <\/span><\/p>\n \u00a0<\/span><\/i><\/p>\n \n\n\n\n\n\n\n\n\n\n\n\n \n [Answers: <\/span><\/i><\/p>\n<\/td>\n \n A<\/span><\/i><\/p>\n<\/td>\n \n B<\/span><\/i><\/p>\n<\/td>\n \n C<\/span><\/i><\/p>\n<\/td>\n \n D<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n 1 <\/span><\/i><\/p>\n<\/td>\n \n Total cost <\/span><\/i><\/p>\n<\/td>\n \n 17,760<\/span><\/i><\/p>\n<\/td>\n \n 17,100<\/span><\/i><\/p>\n<\/td>\n \n 6,720<\/span><\/i><\/p>\n<\/td>\n \n 16,920<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n CPU<\/span><\/i><\/p>\n<\/td>\n \n 148<\/span><\/i><\/p>\n<\/td>\n \n 171<\/span><\/i><\/p>\n<\/td>\n \n 84<\/span><\/i><\/p>\n<\/td>\n \n 141<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n Profit <\/span><\/i><\/p>\n<\/td>\n \n 32<\/span><\/i><\/p>\n<\/td>\n \n 29<\/span><\/i><\/p>\n<\/td>\n \n 16<\/span><\/i><\/p>\n<\/td>\n \n 39<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n 2<\/span><\/i><\/p>\n<\/td>\n \n Total cost <\/span><\/i><\/p>\n<\/td>\n \n 17,115<\/span><\/i><\/p>\n<\/td>\n \n 15,715<\/span><\/i><\/p>\n<\/td>\n \n 8,195<\/span><\/i><\/p>\n<\/td>\n \n 17,475<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n CPU<\/span><\/i><\/p>\n<\/td>\n \n 142.63<\/span><\/i><\/p>\n<\/td>\n \n 157.15<\/span><\/i><\/p>\n<\/td>\n \n 102.44<\/span><\/i><\/p>\n<\/td>\n \n 145.63<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n Profit <\/span><\/i><\/p>\n<\/td>\n \n 37.37<\/span><\/i><\/p>\n<\/td>\n \n 42.85<\/span><\/i><\/p>\n<\/td>\n \n 2.44<\/span><\/i><\/p>\n<\/td>\n \n 34.37<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n \u00a0<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n \n CDR = $240; $45.75; $100; $100; $10<\/span><\/i><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n \u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n ***** EP <\/span>Online <\/span>Study *****<\/span><\/p>\n Thank you for investing your time.<\/span><\/i><\/p>\n Please comment on the article.<\/span><\/i><\/p>\n You can help us by sharing this post on your social media platform.<\/span><\/i><\/p>\n \u00a0<\/span><\/p>\n Jay G<\/span>o<\/span>o<\/span>g<\/span>l<\/span>e<\/span>, Jay YouTube<\/span>, Jay Social Media<\/span><\/span><\/p>\n \u091c\u092f<\/span> \u0917\u0942<\/span>\u0917<\/span>\u0932<\/span>.<\/span> \u091c\u092f<\/span> \u092f\u0941\u091f\u094d\u092f\u0941\u092c<\/span>,<\/span> \u091c\u092f<\/span> \u0938\u094b\u0936\u0932<\/span> \u092e\u0940\u0921\u093f\u092f\u093e <\/span><\/p>\n \u00a0<\/span><\/p>\n  <\/p>\n","protected":false},"excerpt":{"rendered":"   \u00a0 \u00a0 Activity Based Costing | Brief Questions | Descriptive Questions | Analytical Questions | Problems and Answers \u00a0Activity based costing exercise problems and answers includes Brief Questions, Descriptive Questions and Analytical Questions \u00a0 \u00a0 Cost Statement under Traditional Costing Particulars Products \u00a0 P Q R Direct materials \u00a0\u00a0\u00a0\u00a0 [Output x Usage x RMPU] […]<\/p>\n","protected":false},"author":19997,"featured_media":5959,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2917,2306,11],"tags":[2949,2958,2956,2954,2957,2959],"writers":[144],"yoast_head":"\n