abc ( cost accounting)

Chetna runs a business printing logos on sweatshirts. The sweatshirts come in two types, Standard and Superior. The selling price is set at cost plus 30%. The following information is avalable for the year. Urvurnwatrs weres ass nanws: REQUIRED (a) Calculate an overhead alrsorplion rafe based on labour hours. 12] Additional information Staf printing the logos are paid $10 an hour. REQUIRED (b) (i) Caloulate the total cost allocaled to each type of sweatshirt. [4] (ii) Caiculate the selling price for each sweatshirt. [2] Additional information Chetna has suggested that it would be better to alccate the machine set up cost to each product based on the number of times the machine is set up. The machine has to be set up each time there is a different logo. During the year the machine was set up 600 tmes for Standard sweatshirts and 975 times for Superior smeatshins. Other crenteads are still allocated on the basis of labour hours. REQUIRED (c) (i) Calculate the total costs alocated to each type of sweatshirt when machine set up costs are allocated using the number of set up times. [4] (ii) Calculale the revised seling price for each type of sweatshirt. [2] (iii) Calculate the change in seling price for each type of sweatshint. 124 (d) Explain three differences between activity based costing and absorption costing. [6] (e) Advise Chetna which method she should use. Justify your answer. [3] [Total: 25]