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5 Question* (3 Points) KENT Led produces a range of products. Manufacturing is undertaken using one of two processes the Alpha and the Omega Processes.
5 Question* (3 Points) KENT Led produces a range of products. Manufacturing is undertaken using one of two processes the Alpha and the Omega Processes. All of the products are manufactured in batches The current pricing policy has been to absorb all overheads using direct labour hours to obtain total cost. A recent detailed analysis has examined overhead cost the results are: Analysis of overhead costs Cost per month (L) Monthly volume Alpha Process cost 192.000 960 heun Omega Process cost 89.600 2.560 hours Setup cost 85,800 Handling charges 91,200 380 movements Other overboada 101.400 (see below) Total overhead couts 560.000 There are 2.000 direct labour hours available each month 530 JT100 Two of KENT's products are a JTIT and a GR27. JTIOIs are produced by the Alpha Process in a simple operation. GR27s are manufactured by the Omega Process. Both products are sold by the metre Details of the two products are: GR17 Monthly volume 1000 metres 300 metres Ratch size 1.000 metres SO metres Processing time per batch Alpha 100 hours 25 hour Set paper hash 1 - 2 Handling charges per hatch 1 movement 5 movements Materials permetre 15 Direct labour permetre (Direct cost) 1 hour bour Direct labour is paid at 16 per hour Q. Calculate the total cost per metre for both JTils and GR27 detailed above, using traditional costing based on direct labour hours. 312 & 311 respectively 172 & 171 respectively 304 & 303 respectively 164 & 136 respectively
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