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Chee Faii Sdn Bhd has RM2,500,000 overhead costs which have been assigned to the following activity cost pool. Activity Cost Pool Overhead Cost (RM) Machine

Chee Faii Sdn Bhd has RM2,500,000 overhead costs which have been assigned to the following activity cost pool.

Activity Cost Pool Overhead Cost (RM)
Machine Set-up 200,000
Purchasing Materials 500,000
Inspecting Products 300,000
Assembling Products 600,000
Machine Processing 900,000
TOTAL OVERHEAD 2,500,000

other details

COST DRIVING DVK WJB HZW TOTAL
Machine Setups 2,000 1,500 1,500 5,000
Number of Purchase Requisitions 5,000 4,000 1,000 10,000
Inspection Hours 10,000 9,000 1,000 20,000
Number of Parts Requiring Labor 15,000 3,000 12,000 30,000
Machine Hours 80,000 60,000 10,000 150,000

DVK WJB HKW
Direct Materials RM 490,000 RM 600,000 RM 2,925,000
Direct Labor RM 1,400,000 RM 275,000 RM 1,075,000
Productions (Units) 140,000 100,000 250,000

you are Required:

1a. Compute the production cost per unit for product DVK, WJB and HZW by using Activity Based Costing.

1b.Determine the Selling Price of the following products

i) Product DVK Selling price based on 25% profit margin

ii) Product WJB Selling price based on 25% mark up costs.

iii) Product HZW Selling price based on 30% profit margin.

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