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01MySpace Inc. produces two main products: Kenanga and Lily. Table O1shows recent production data related to these products. Table Q1: Production Information Product/Items Quantity produced
01MySpace Inc. produces two main products: Kenanga and Lily. Table O1shows recent production data related to these products. Table Q1: Production Information Product/Items Quantity produced Selling price per unit (RM) Number of direct labour hours/unit Cost of direct labour (RM)/unit Direct Material cost/unit (RM) Production Cost Driver volume Machines set-up Machining Inspecting & Quality Control Number of orders Overhead estimation costs for each activities: Machines set-up Machining Inspecting & QC Ordering costs Kenanga Lily 48,00020,000 200 350 4 90 200 480 43,00036,500 220 700 2,400 1,800 (RM) 149,600 318,000 174,800 14,700 Calculate the unit cost for each job using a traditional plant wide overhead rate based on direct labour hours (a) (6 marks) Analyse the cost per unit for each job using Activity Based Costing (ABC) (b) (10 marks) Calculate the profitability for the each product line using traditional and ABC method. (6 marks) (c) Advice the company on the next course of action (d)
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