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1. Triple Limited makes three types of gold watch the Diva (D), the Classic (C) and the Poser (P). A traditional product costing system is
1. Triple Limited makes three types of gold watch the Diva (D), the Classic (C) and the Poser (P). A traditional product costing system is used at present; although an activity-based costing (ABC) system is being considered. Details of the three products for a typical period are: Product D Product C Product P Costs relating to set-ups Costs relating to machinery Costs relating to materials handing Costs relating to inspection Total production overhead Product D Product C Product P Labour hours Required: Hours per unit % 196 Total production overheads are $654,500 and further analysis shows that the total production overheads can be divided as follows The following total activity volumes are associated with each product line for the period as a whole Number of inspections 150 180 670 1,000 75 115 Machine hours 14 670 Number of Number of movements Set ups of material 21 Materials Cost per unit ($) 20 12 25 Production Units 750 1,250 7,000 (disthepictions to ABC on pricing and profitability marki Calculate the cost per un for each product using ABC principles to dec (c) Explain why costs per unit called under ABC an chen very diferents costs per unit calculated under tradional ethods Use the infomation from Triple Limited to mak
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