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1. The following table lists out the overhead cost: Activity cost pool Overhead cost () Additional Notes Job-order set up 33,000 Procurement and placement 360,000

1. The following table lists out the overhead cost:

Activity cost pool

Overhead cost ()

Additional Notes

Job-order set up

33,000

Procurement and placement

360,000

Installation of winding system

195,000

An auto winding system is fitted with every watch

Quality inspection (machine)

60,000

Quality inspection (manual)

21,000

Finishing

140,000

Hand-made finishing

Packaging and delivery

44,250

The company packages and delivers watches in batches containing 10 watches per batch. On an average, the packaging and delivery cost is the same for all batches (10 watches= 1 batch)

Factory cleaning services

30,000

A cost that is not consumed by any of the products

2. The company pays 8 per direct labour hour

3. The following table lists out some key figures for this firm:

Description

Quantity

Number of watches

1,500 units

Direct labour hours

7,000 hours

Machine hours

14,000 hours

Number of job orders

110

Inspection hours using machine

800 hours

Number of cycles for procurement and placement

2,400 times

i) What would be the sales price of the following two products using the ABC system if the company adds 30% mark up on total allocated costs?

Model

Luxury

Sports

Category

Female

Male

Job order number

LF-340 & LF-341

SM-119 & SM-120

Number of units

30

50

Direct materials ( per unit)

85

55

Direct labour hours

200

250

Machine hours

225

750

Inspection hours using machine

12

40

Number of cycles for procurement and placement

50

80

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