EXERCISE 1 Notation :11/20 The Company ITEKA Inc. manufactures and sells 5 models of furniture. Last year, the company has manufactured and sold 10 000 of units with a total amount of sales estimated C1 540 000. Each unit of product requiring one manufacturing direct labour hour, the company has spent 10 000 e labour hours. The product P: One model is considered as the most important: product P. Last year, the company sold 2 500 units of P. The direct manufacturing costs and selling price of P are: Product P Direct costs: Total perunit Raw Materials (40 components) in 120 Direct labour (1 hour 16/hour) 16 Selling price of I unit of P (in) 200 ITEKA Inc. faces many indirect costs estimated 590 000. Those indirect costs are obviously related to the whole production (10 000 units) Indirect costs Purchasing Department Sales & after sales in 122 500,00 312 900,00 89 600,00 Manufacturing Department Admnistration Department 40 000,00 Research & Development Department 25 000,00 Total Indirect costs 590 000,00 Part 1-Traditional indirect costs allocation 3 points Indirect cost are allocated to each product according to the number of direct labour hours required. QUESTIONS 1-1. How much is indirect (overhead) cost per product? Answer: 1-2. How much is the product P manufacturing cost (for unit of P)? Answer: 1-3. How much is the product P full costing? How much is the margin of P in value and in %? Please comment your result