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Greenline (Pty) Lid (Greenillne) is a company that manufactures two types of cycling bikes named Rocky and BMY. Greenline has a 31 December year-end. Groenline
Greenline (Pty) Lid ("Greenillne") is a company that manufactures two types of cycling bikes named Rocky and BMY. Greenline has a 31 December year-end. Groenline imports most of the components used in the bikes from European countries. The company has seen a rise in the components' prices due to the war between Russia and Ukraine, and there has also been a significant rise in the manufacturing overheads. Greenllne allocates its manufacturing overheads using the traditional costing method. The management accountant has suggested that the company should adopt the activity-based costing method to determine activities where overhead costs can be reduced. The management accountant has conducted an analysis of manufacturing costs and established that the budgeted costs for various activities are as follows for the last six months of the 2022 financial year: The analysis indicated the following information regarding the company's products: Additional information 1. Greenline has budgeted to produce a total of 2.866 bikes, 826 Rocky and 2040 BMY tor the last half of 2022 . Greeniline has budgeted to produce a total of 2866 bikes, 826 Rocky and 2040 BMY for the last half of 2022 . MAC2601/102/2022 2. It requires 150 machine minutes to manufacture one Rocky bike and 225 machine minutes to manufacture one BMY. The number of oroduction runs was identified as the cost driver for the assembling activity
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