Modern Products Company is applying activity based costing on its products costing. In this context the following data has been extracted from its cost accounting record: Wages and salaries Rs. 600,000 Other overheads cost Rs. 200,000 Total Rs. 800,000 Activity cost pool Activity drivers Total activity Supporting direct labour Number of direct labour 10,000 direct labour hours Order processing Number of customer orders 200 orders Customers support Number of customers 100 customers Distribution of resources utilization was as under: Supporting Order Customer Total Direct labour processing support Wages and Salaries 50% 30% 20% 100% Other overheads cost 40% 30% 30% 100% During current month the company has executed one order for a new customer namely Ali Traders. This customer did not order any other products during the period. The salient data concerning the foregoing customer is as under: Units ordered 20 units Direct labour hours 4 hours per unit Selling price Rs. 1,000 per unit Direct material cost Rs. 300 per unit Direct labour Rs. 100 per unit Required a. Compute the allocation of overheads cost to activity cost pools. b. Determine the activity rates of each cost pool. c. Allocate the overheads cost to the customer- Ali Traders for execution of his order. d. Draw a customer margin report in respect of Ali Traders.

Question No. 03. Modern Products Company is applying activity based costing on its products costing. In this context the following data has been extracted from its cost accounting record Wages and salaries Rs. 000,000 Other overheads cost Rs 200,000 Total Rs. 800,000 Activity cost pool Activity drivers Total activity Supporting direct labour Number of direct labour 10,000 direct about hours Order processing Number of customer orders 200 orders Customers support Number of customers 100 customers Distribution of resources utilization was as under Supporting Order Customer Total Direct labour processing support Wages and Salaries 50% 30% 20% 100% Other overheads oost 40% 30% 30% 100% During current month the company has executed one order for a new customer namely Ali Traders. This customer did not order any other products during the period. The salient data concerning the foregoing customer is as under Units ordered 20 units Direct labouchours 4 hours per unit Selling price Rs 1,000 per unit Direct material cost Rs 300 per unit Direct labour Rs 100 per unit Required a. Compute the allocation of overheads cost to activity cost pools b. Determine the activity rates of each cost pool Allocate the overheads cost to the customer- All Traders for execution of his order. d. Draw a customer margin report in respect of Ali Traders. (Marks 06)