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AMA Desks Pty Ltd produces two types of smart desks that can be raised to different heights: Automatic and Manual. The business started in 2019
AMA Desks Pty Ltd produces two types of smart desks that can be raised to different heights: Automatic and Manual. The business started in 2019 and since COVID the sales of Automatic raised desks are increasing. At the moment, AMA Desks Pty Ltd uses the traditional costing method using the direct labour dollars as the cost driver. The following costs are provided below: Direct Materials Direct Labour Dollars Number of Units Automatic $750,000 $200,000 1500 Manual $1,500,000 $350,000 3500 The total manufacturing overhead is $1,400,000 Required: 34a) N A. Calculate the indirect cost rate according to traditional costing method (round to 2 decimal places only) (1 mark) 340) 1 Mark C. Calculate the direct cost per unit for Automatic only. (1 mark) 34b) 2 Marks B. The allocation of indirect costs, for both products, are: Automatic $509,090.91 Manual $890,909.09 Total Indirect Cost Calculate the total cost per unit for Automatic only. (2 marks)
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