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nem tamil man The wing budget Fa thaigater parent at ames of its podalam a The animals anpanai The Drew tamil awarene D The has 100002 Scal | - - - fis nrhea . H aadala ce Total Direct Cout 217.500 72,500 The tow number of machine hun he food processing the total number of batches required and the total number of machine seen the batch preparation process to produce 75.000 GS1 and 35,000 GS2 are shown below GSI GS2 Total Output in units 75.000 15.000 Machine on perunt in food processing 3 5 Total number of machine hours 75,000 300.000 Number of support 2 5 Totalrunder of batches Ooh 180 Total number of machine sep Reged: Using ABC revise the total budgeted production overhead cost for each of the meats by wlocating the production budgeted overhead costs for the activities Food Processing and Butch Preparation based on the cost drivers machine hours and machine setups Allocation of wheads using ABC 632 Total Output in unit 75.000 15.000 Total rumber of machine hours 225.000 75.000 300.000 Alcate Machining budgeted production.com 190.000 Total number of machine the Batch Preparation budges production.com 550.000 E150.000 Tots Budgeted Production Overhead con Calculate the revised total and per unit budgeted produit eests using ABC. Output in units Total Budgeted Production Overhead Cost Total Dred Costs Total Budgeted Product Cou Per unt Budgeted Product Corting ABC GS1 G52 Total 75.000 15.000 (150.000 C217.500 73.500 201.000 441.000 171 1) Calculate the revised selling price for each meal using the ABC budgeted total cost and compare the results to those even by using the current traditional costing and sale price Information given in the question GS1 082 Budgeted Product Cost per uniting ABC Revised Selling Price using ADC @ 3% prot markup Budgeted product cost using current traditional method 0740 Current sales price alte profit mark up 39,90 9.90 d) State giving reasons, whether or not the sale price for the meal should be reduced to increase sales. 12 marks) (el Briefly, critically evaluate Activity Based Corting marke 2. FarmFresh produces two "Gourmet Supper prepared meals. company currency overheads to units using a traditional method based on machine hours. The management accountant has concerns over the accuracy of the information and is considering introducing Activity Based Costing to allocate overheads to units. The following information relates to the budget for the year ahead: Activities Budgeted Production Overhead Food Processing 90,000 Batch Preparation 60.000 Total 150,000 Direct materials Product data GS1 GS2 1.90 0.1 3 5 2 75,000 15,000 Production / Sales (units) 2.90 Direct materials cost per unit () 0.2 Direct labour hours per unit (hours) Machine hours per unit in machining process (hours) 5 Number of machine Set Ups per batch of 500 meals It is estimated that direct labour costs will be 10 per hour for the budgeted period and a profit mark up of 35% of total product cost is added to attain the selling price. Using the current traditional costing method the total budgeted product cost for GS1 is 4.40 and for GS2 is 7.40 Both products are produced in batches of 500 units per batch. The sales manager has reported that sales for GS2 have fallen, however, the sales for GS1 have risen. The sales manager has suggested that the sales price for GS2 be reduced The total direct materials cost, total direct labour cost and the total direct cost to produce 75,000 GS1 and 15,000 GS2 are shown below: Direct costs GS1 GS2 75,000 15,000 Output in units Direct materials cost per unit (E) 1.90 2.90 The total direct materials cost, total direct labour cost and the total direct cost to produce 75,000 GS1 and 15,000 GS2 are shown below: Direct costs GS1 GS2 75,000 15,000 1.90 2.90 Output in units Direct materials cost per unit (E) Total Direct Material cost (E) Direct labour hours per unit (hours) @ 10 per hour Direct Labour Cost per unit (E) Total Direct Labour cost () 142,500 0.1 1.00 75,000 43,500 0.2 2.00 30,000 170 Page Total Direct Cost (E) 217,500 73,500 The total number of machine hours in the food processing, the total number of batches required and the total number of machine setups in the batch preparation process to produce 75,000 GS1 and 15,000 GS2 are shown below: GS1 GS2 Total Output in units 75,000 15,000 Machine hours per unit in food processing (hours) 3 5 Total number of machine hours 225,000 75,000 300,000 Number of set ups per batch 2 5 Total number of batches (Outputbatch size) 150 30 180 Total number of machine setups 300 150 450 Required: (a) Using ABC revise the total budgeted production overhead cost for each of the meals by allocating the production budgeted overhead costs for the activities Food Processing and Batch Preparation based on the cost drivers machine hours and machine setups. (1 mark) (0) allocating the production budgeted overhead costs for the activities Food Processing and Batch Preparation based on the cost drivers machine hours and machine setups. (1 mark) (b) GS1 GS2 Total Allocation of overheads using ABC Output in units Total number of machine hours Allocate Machining budgeted production cost 75,000 225,000 15,000 75,000 300,000 90,000 Total number of machine setups 300 150 450 Batch Preparation budgeted production cost 60,000 150,000 Total Budgeted Production Overhead Cost Calculate the revised total and per unit budgeted product costs using ABC. (1 mark) GS1 75,000 GS2 15,000 Total Output in units Total Budgeted Production Overhead Cost Total Direct Costs Total Budgeted Product Cost Per unit Budgeted Product Cost using ABC 217,500 73,500 150,000 291,000 441.000 171 Page Total GS1 75,000 GS2 15,000 Output in units Total Budgeted Production Overhead Cost Total Direct Costs Total Budgeted Product Cost Per unit Budgeted Product Cost using ABC 217,500 73,500 150,000 291,000 441,000 171 Pa Le) Calculate the revised selling price for each meal using the ABC budgeted total cost and compare the results to those given by using the current traditional costing and sales price Information given in the question. (1 mark) GS1 GS2 Budgeted Product Cost per unit using ABC Revised Selling Price using ABC @ 35% profit mark-up Budgeted product cost using current traditional method 14.40 7.40 Current sales price after profit mark up 35% (E) ES 4 E9.99 (d) State, giving reasons, whether or not the sales price for the GS2 meal should be reduced to Increase sales. (2 marks) fe) Briefly. critically evaluate Activity Based Costing 15 marks) 30 , LOG # 3 4 % 5 & 7 6 20 8 0 nem tamil man The wing budget Fa thaigater parent at ames of its podalam a The animals anpanai The Drew tamil awarene D The has 100002 Scal | - - - fis nrhea . H aadala ce Total Direct Cout 217.500 72,500 The tow number of machine hun he food processing the total number of batches required and the total number of machine seen the batch preparation process to produce 75.000 GS1 and 35,000 GS2 are shown below GSI GS2 Total Output in units 75.000 15.000 Machine on perunt in food processing 3 5 Total number of machine hours 75,000 300.000 Number of support 2 5 Totalrunder of batches Ooh 180 Total number of machine sep Reged: Using ABC revise the total budgeted production overhead cost for each of the meats by wlocating the production budgeted overhead costs for the activities Food Processing and Butch Preparation based on the cost drivers machine hours and machine setups Allocation of wheads using ABC 632 Total Output in unit 75.000 15.000 Total rumber of machine hours 225.000 75.000 300.000 Alcate Machining budgeted production.com 190.000 Total number of machine the Batch Preparation budges production.com 550.000 E150.000 Tots Budgeted Production Overhead con Calculate the revised total and per unit budgeted produit eests using ABC. Output in units Total Budgeted Production Overhead Cost Total Dred Costs Total Budgeted Product Cou Per unt Budgeted Product Corting ABC GS1 G52 Total 75.000 15.000 (150.000 C217.500 73.500 201.000 441.000 171 1) Calculate the revised selling price for each meal using the ABC budgeted total cost and compare the results to those even by using the current traditional costing and sale price Information given in the question GS1 082 Budgeted Product Cost per uniting ABC Revised Selling Price using ADC @ 3% prot markup Budgeted product cost using current traditional method 0740 Current sales price alte profit mark up 39,90 9.90 d) State giving reasons, whether or not the sale price for the meal should be reduced to increase sales. 12 marks) (el Briefly, critically evaluate Activity Based Corting marke 2. FarmFresh produces two "Gourmet Supper prepared meals. company currency overheads to units using a traditional method based on machine hours. The management accountant has concerns over the accuracy of the information and is considering introducing Activity Based Costing to allocate overheads to units. The following information relates to the budget for the year ahead: Activities Budgeted Production Overhead Food Processing 90,000 Batch Preparation 60.000 Total 150,000 Direct materials Product data GS1 GS2 1.90 0.1 3 5 2 75,000 15,000 Production / Sales (units) 2.90 Direct materials cost per unit () 0.2 Direct labour hours per unit (hours) Machine hours per unit in machining process (hours) 5 Number of machine Set Ups per batch of 500 meals It is estimated that direct labour costs will be 10 per hour for the budgeted period and a profit mark up of 35% of total product cost is added to attain the selling price. Using the current traditional costing method the total budgeted product cost for GS1 is 4.40 and for GS2 is 7.40 Both products are produced in batches of 500 units per batch. The sales manager has reported that sales for GS2 have fallen, however, the sales for GS1 have risen. The sales manager has suggested that the sales price for GS2 be reduced The total direct materials cost, total direct labour cost and the total direct cost to produce 75,000 GS1 and 15,000 GS2 are shown below: Direct costs GS1 GS2 75,000 15,000 Output in units Direct materials cost per unit (E) 1.90 2.90 The total direct materials cost, total direct labour cost and the total direct cost to produce 75,000 GS1 and 15,000 GS2 are shown below: Direct costs GS1 GS2 75,000 15,000 1.90 2.90 Output in units Direct materials cost per unit (E) Total Direct Material cost (E) Direct labour hours per unit (hours) @ 10 per hour Direct Labour Cost per unit (E) Total Direct Labour cost () 142,500 0.1 1.00 75,000 43,500 0.2 2.00 30,000 170 Page Total Direct Cost (E) 217,500 73,500 The total number of machine hours in the food processing, the total number of batches required and the total number of machine setups in the batch preparation process to produce 75,000 GS1 and 15,000 GS2 are shown below: GS1 GS2 Total Output in units 75,000 15,000 Machine hours per unit in food processing (hours) 3 5 Total number of machine hours 225,000 75,000 300,000 Number of set ups per batch 2 5 Total number of batches (Outputbatch size) 150 30 180 Total number of machine setups 300 150 450 Required: (a) Using ABC revise the total budgeted production overhead cost for each of the meals by allocating the production budgeted overhead costs for the activities Food Processing and Batch Preparation based on the cost drivers machine hours and machine setups. (1 mark) (0) allocating the production budgeted overhead costs for the activities Food Processing and Batch Preparation based on the cost drivers machine hours and machine setups. (1 mark) (b) GS1 GS2 Total Allocation of overheads using ABC Output in units Total number of machine hours Allocate Machining budgeted production cost 75,000 225,000 15,000 75,000 300,000 90,000 Total number of machine setups 300 150 450 Batch Preparation budgeted production cost 60,000 150,000 Total Budgeted Production Overhead Cost Calculate the revised total and per unit budgeted product costs using ABC. (1 mark) GS1 75,000 GS2 15,000 Total Output in units Total Budgeted Production Overhead Cost Total Direct Costs Total Budgeted Product Cost Per unit Budgeted Product Cost using ABC 217,500 73,500 150,000 291,000 441.000 171 Page Total GS1 75,000 GS2 15,000 Output in units Total Budgeted Production Overhead Cost Total Direct Costs Total Budgeted Product Cost Per unit Budgeted Product Cost using ABC 217,500 73,500 150,000 291,000 441,000 171 Pa Le) Calculate the revised selling price for each meal using the ABC budgeted total cost and compare the results to those given by using the current traditional costing and sales price Information given in the question. (1 mark) GS1 GS2 Budgeted Product Cost per unit using ABC Revised Selling Price using ABC @ 35% profit mark-up Budgeted product cost using current traditional method 14.40 7.40 Current sales price after profit mark up 35% (E) ES 4 E9.99 (d) State, giving reasons, whether or not the sales price for the GS2 meal should be reduced to Increase sales. (2 marks) fe) Briefly. critically evaluate Activity Based Costing 15 marks) 30 , LOG # 3 4 % 5 & 7 6 20 8 0