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Comparison of traditional product costing with ABC 4 1 DRP Limited has recently introduced an Activity Based Costing system. It manufactures three produces, details of

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Comparison of traditional product costing with ABC 4 1 DRP Limited has recently introduced an Activity Based Costing system. It manufactures three produces, details of which are set out below. Particulars Product D Product R Product P Budgeted annual production 100000 100000 50000 (units) Batch size (units) 100 50 25 Machine set-ups per batch 3, 6 Purchase orders per batch 2 Processing time per unit 2 3 3 (minutes) Three cost pools have been identified. Their budgeted costs for the year ending 30 March 2013 are as follows: Itachine set ups costs Rs.150000 Purchasing of materials Rs.70000 Rs.80000 Processing The budgeted machine set up cost per vnit uf product Ris nearest to a Rs. 0.50 b. Rs. 0.60 . Rs. 6.52 d. Rs. 26.09 2020.8-12-3-21-55

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