Help with the qn thank you.
You have recently been appointed as management accountant to Bragg Ltd. The 1 (continued) company manufactures three types of printers. The following details relate to the three products for the production month of June 2021. Activity level for each product Product Laser Dot Matrix Ink Jet Laser Dot Matrix Ink Jet Total Output in units 60 50 600 Number of set ups 4.800 4.200 1,900 10,900 Total direct material cost $24,000 $25,000 136,000 Number of inspections 1,100 1.650 650 3.400 Total direct labour cost $16,800 $10,500 $12,600 Machine hours per unit Required: Note: all calculations can be shown to 2 decimal places The company currently absorbs overheads on the basis of machine hours. The total production overheads for the month were $130,000. The product cost calculated using a) Calculate the cost per unit of each product using Activity-Based Costing. absorption costing is as follows: Laser Dot Matrix Ink Jet (10 marks) E E E Material 24,000 25,000 36,000 b) In addition given that Bragg Lid aim to achieve a 15% sales margin, calculate the Labour 16,800 10,500 12,600 selling prices per unit using both the traditional and ABC costing systems and Overhead 54.744 34.215 41.058 comment on the results. (3 marks) Total cost 95.544 69.715 89.658 Cost per unit 159.24 139.43 149.43 c) The company has an opportunity to lease a machine (machine Z) that would serve the same purpose as Machine A. Machine A was originally purchased for $1,000,000 five Overhead Absorption Rate: and a half years ago. At the time of purchase the assumption was that the machine Total production overheads 130.000 = 22.81 per machine hour had an estimated useful life of six years with nil residual value and would be Total Machine Hours 5,700' depreciated using the straight line method. Depreciation is charged monthly. The "total machine hours (600x4)+(500x3)+(600x3) machine could be sold for $100,000. The lease costs of the new machine would be $20,000 per month. Recalculate the cost per unit of each product assuming that the You are considering the introduction of activity based costing and observe that the company decides to lease machine Z. Assume the number of units sold, the selling production overheads are already captured by each cost centre. An analysis of the E130,000 by the percentage attributable to each department is detailed below. You price per unit calculated using ABC and the time taken on each machine remain the determine the associated cost drivers for each department and their use by each product, same (4 marks) which are also included in the table below. d) Analyse the impact to Bragg Lid of leasing machine Z. (3 marks) You have been advised that each product passes through two machines. The time taken on each machine is detailed below: Laser Dot Matrix Ink Jet Minutes Minutes Minutes Machine A 145 140 100 Machine B 95 40 80 Total minutes 240 180 180 Cost type Percentage of Total Cost Driver Overhead Cost (%) Machine A 32 Machine time Machine B 44 Machine time Set up 10 Number of set ups Quality Inspection 14 Number of inspections Total 100
