Question
A Factory produces 3 types of shoes. While producing, for switching over from one type to another, there is a shift-over process involved. Costs incurred
A Factory produces 3 types of shoes. While producing, for switching over from one type to another, there is a shift-over process involved. Costs incurred are as follows: Shift-over costs Rs. 50,000 Factory Overheads Rs. 1,00,000/- Packing costs Rs. 20,000/- Engineering Costs Rs. 30,000/- Supervisor Costs Rs. 10,000/- Quantity produced A- 1000, B 2000, C- 4000 Allocate the costs to the 3 shoes (A, B and C) using Traditional Costing method and Activity Based Costing. Some other information of the 3 products is as under:
A B C No. of Switches 3 4 2 Machine Hours 20 18 15 No. of Receipts / packs 4 5 8 Engineering Hours 30 40 50 Supervisor Hours spent 10 12 10
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