JIM Ltd has identified the following overhead costs and cost drivers for next year

Expenses /cost	Expected ( cost) $
Selling cost	75,000
Administration Cost	45,000
Manufacturing overhead cost	38,000
Utilities cost [store]	12,000
Cost Driver	E( actual transactions)
Direct Labour Hours	4000
Machine Hours	25,000

The following is the cost of 2 products made by the company :

	Product X	Product Y
Direct materials	$4200	$1600
Direct Labor Hour Rate	$39.50	$24.50
Units completed	450	100
DLH (hours)	560	420
Machine hours	60	40

REQUIRED

1. Calculate the Predetermined Rate [PR] for product X using machine hours and product Y using direct labour hours

2. What is the applied cost assigned to product X and product Y?

3. Calculate the total product cost using FBC for both products

4. Calculate the unit cost for each product

5. Is the applied cost for each product under or over-applied?

6. What are the disadvantages of FBC and what solution has been offered as alternative?