Continental Communications Ltd manufactures two types of telephone: the standard and the advanced. The budget for the next financial year is as follows:

Required

(a) Calculate the total cost per unit produced for each product.

(b) Prepare a presentation to be given to the board demonstrating the calculations and interpreting the results.

Transcribed Image Text:

Standard Advanced Production output 100,000 50,000 Direct labour 200,000 50,000 100,000 20,000 Direct materials The indirect overhead costs have been identified with three cost drivers as follows: Cost driver Number of production runs Quality test performed Deliveries made Cost assigned Activity level Standard Advanced 150,000 40 10 40,000 8 12 20,000 80 20