Exercise 1: Shabu Co Company Shabu produces and sells 2 products: A and B. Table below shows cost information for August, year N: Elements Production Sales Consumption of raw materials Direct labour Prod 1 @ 9 per hour Direct labour Prod 2 @ 8 per hour Direct expenses Sales commission per unit sold Advertisement A 28,000 units 24,600 units @ 27.99 per unit 21,850 Kg of M and 9,100 Kg of N Indirect costs (in ) of the Ash Co are as follows: 2,250 h 1,200 h 9,000 1.30 23,570 B 11,000 units 11,900 units @ 35.99 per unit 17,600 Kg of N 1,980 h 1,200 h 6,000 1.70 11,700 Production department Service departments Cost items Purchasing HR Store Administr ation Prod 1 Prod 2 Assembly Apportioned cost 5,000 7,000 15,000 22,000 32,000 22,000 21,000 Reapportionment Store Administration HR Basis 25% Kg of raw materials purchased 5% 35% 15% 15% 30% 20% 30% 25% 25% 35% 25% 15% Hours of Hours of direct labour of Prod 1 direct labour of Prod 2 Units produced Total production cost of A and B comprises of raw materials, direct labour in Prod 1 and Prod 2 department, direct expenses and indirect costs from Prod 1, Prod 2 and Assembly department. Raw materials M and raw material N are managed by Mr. Sok and Mr. Sao. Each of them is paid 750 for August and this should be included to cost of raw materials. Information for stock Raw materials M Ending inventory of August 900 Kg Ending inventory of July Raw materials N 500 Kg 4,000 Kg @ 3.40 per KG 4,700 Kg @ 3.55 per KG A B Purchase of raw materials for August: 1,550 units 832 units 150 units @ 8.15 per unit 1,500 units @ 13.88 per unit 19,000 kg of M @ 2.40 per kg 22,800 kg of N @ 2.60 per kg Required 1. Prepare an analysis showing the distribution of overhead costs to departments. Reapportion cost of service cost centre using the reciprocal method. 2. Calculate OAR of department Purchasing, Prod 1, Prod 2 and Assembly. 3. Calculate purchase cost of raw materials for August (cost of materials + indirect cost from purchasing department + direct expense of raw materials if any). 4. Show stock cards of raw materials M and N. 5. 6. 7. 5628 Calculate production cost of A und B. Show stock cards of A and B. Calculate distribution cost of each product (sales commission, advertisement and indirect expense if any). 8. Show analysis of profit per unit and profit of each product