Baden-Möbel GmbH manufactures a variety of prestige boardroom chairs. Its job-costing system was designed using an activity-based

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Baden-Möbel GmbH manufactures a variety of prestige boardroom chairs. Its job-costing system was designed using an activity-based approach. There are two direct-cost categories (direct materials and direct manufacturing labour) and three indirect-cost pools. These three cost pools represent three activity areas at the plant:
Baden-Möbel GmbH manufactures a variety of prestige boardroom chairs. Its

Two styles of chairs were produced in March, the executive chair and the chairman chair. Their quantities, direct material costs and other data for March 2015 are as follows:

Baden-Möbel GmbH manufactures a variety of prestige boardroom chairs. Its

The direct manufacturing labour rate is ‚¬2 per hour. Assume no opening or closing stock.
Required
1. Calculate the March 2015 total manufacturing costs and unit costs of the executive chair and the chairman chair.
2. Suppose that the upstream activities to manufacturing (R&D and design) and the downstream activities (marketing, distribution and customer service) were analysed. The unit costs in 2015 were budgeted to be as follows:
Upstream activities Downstream activities
Executive chair....................‚¬60........................................‚¬110
Chairman chair....................146.........................................236
Calculate the full product costs per unit of each line of chairs. (Full product costs are the sum of the costs in all business function areas.)

Distribution
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Management and Cost Accounting

ISBN: 978-1292063461

6th edition

Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan

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