Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need it faster Answer ALL FOUR (4) questions. Question 1 GIGI Sdn. Bhd. manufactures two products, Xathin and Omeg. The cost accountant has prepared the

need it faster

image text in transcribed
Answer ALL FOUR (4) questions. Question 1 GIGI Sdn. Bhd. manufactures two products, Xathin and Omeg. The cost accountant has prepared the cost information of two products for the month of June 2021 as follows: Standard costs per unit: Xathin Omeg (RM) (RM) Direct materials 45 60 Direct labour 48 80 X Variable production overhead 11 12 sellprice 250 35 0 Output in units 3.800 6.600 Labour hours per unit 12 20 X The budgeted selling price is RM250 and RM330 respectively. The total fixed production overheads for the month of June 2021 is estimated to be RM568,320 and is absorbed on the basis of direct labour hours. Budgeted total direct labour hours for the period is 177,600. In view of the company's to adopt Activity Based Costing (ABC), an analysis of the production support activities and their related fixed overheads are showed as follows: Activity related Costs (RM) Cost driver Xathin Omeg overhead Set up 80,000 Number of set up 150 100 Materials handling 150,000 Number of materials 80 120 handling Quality inspection 160,000 Number of inspection 500 800 The remaining production overheads are absorbed on the basis of direct labour hours. Required: (a) Calculate the profit per unit of product Xathin and product Omeg using: (i) Absorption costing method; (6 marks) (ii) Activity based costing method. Workings are required to round off to two decimals. (12 marks) (b ) Comment on the differences in the profit per unit for each product generated using absorption costing method and activity-based costing method. (7 marks) [Total: 25 marks]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Managerial Accounting

Authors: Peter C. Brewer, Ray H Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

4th Canadian edition

978-1259103261

More Books

Students also viewed these Accounting questions