Question
British Hairways designs three types of hairdryers: X, Y, and Z. British Hairways recently undertook a cost study and determined that there were six main
British Hairways designs three types of hairdryers: X, Y, and Z. British Hairways recently undertook a cost study and determined that there were six main factors causing costs to be incurred. As a result, they designed a new system with a separate cost pool for each factor. The factor, cost driver, and total cost pools are as follows:
Factor | Cost Driver | Total Cost Pool |
Factory worker wages | Direct labour hours | $1,391,600 |
Depreciation on machines | Machine hours | $936,000 |
Materials handling and storage costs | Kilograms of materials | $129,600 |
Labour used to change machinery in preparation of a new batch | Number of setups | $160,000 |
Costs of order processing | Number of batches | $25,650 |
Shipping expenses | Number of orders shipped | $114,000 |
The company is now preparing a budget for next year. The following predictions have been made:
Product X | Product Y | Product Z | |
Units to be Produced | 10,000 | 800 | 5,000 |
Direct Material Costs | $66/unit | $88/unit | $45/unit |
Direct Labour Hours | 4 hours/unit | 18 hours/unit | 9 hours/unit |
Machine Hours | 7 hours/unit | 15 hours/unit | 7 hours/unit |
Kilograms of Materials | 3 kg / unit | 4 kg / unit | 2 kg / unit |
Number of setups | 100 | 50 | 50 |
Number of batches | 300 | 200 | 70 |
Number of orders shipped | 1,000 | 800 | 2,000 |
Required. Complete the following grid with the new costing data for the following cost pools. Do not use $ signs in your final answer.
Product X | Product Y | Product Z | |
Factory worker wages | $ | $ | $ |
Depreciation on machines | $ | $ | $ |
Shipping expenses | $ | $ | $ |
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