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Micron limited manufactures three types of drugs namely Apax, Bex, Cox and Dos using the same processing plant. The following information relates to the company:
Micron limited manufactures three types of drugs namely Apax, Bex, Cox and Dos using the
same processing plant. The following information relates to the company:
Product Apax Bex Cox Dos
Units produced
Material cost per unit Ksh
Labour hours per unit
Machine hours per unit
Labour cost per unit Ksh
The cost accountant analysed the production overheads recorded under the following headings:
Overhead cost element Amount Ksh
Setup costs
Factory costs machine oriented activity
Cost of ordering materials
Materials handling costs
Administration cost for spare parts
Investigations into the production overhead activities for the period reveal the following:
Product Apax Bex Cox Dos
Number of setups
Number of material orders
Number of times material
Was handled
Number of spare parts used
Required:
i Unit cost per product using the machine hour rate marks
ii Unit cost per product using the activity based costing marks
iii Unit price per product if a markup of is used marks
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