Question
Overheads for the quarter Salary of GM Factory Sales and Distribution expenses Machine Depreciation & Repairs Machining of components and their assembly Machine Insurance Product
Overheads for the quarter Salary of GM Factory Sales and Distribution expenses Machine Depreciation & Repairs Machining of components and their assembly Machine Insurance Product details for the quarter Particulars No. of units to be manufactured and sold (normal capacity) Material cost per unit 4 Direct labor cost per unit Machine hours per unit No. of shipments Product A 5000; Rs. 450,000 550,000 242,000 54,000 20,900 Product B 4000; sold @Rs. 2000 persold @ Rs. 2500 pe unit unit 5 components @ 7 components @ Rs. 60 per component 0.5 Hour Rs. 100 per component 0.6 Hour @Rs. 250 per hour @Rs. 400 per hour 2 Hours 5 3 Hours 10 Required: (1) Using ABC approach, determine the per unit overheads to be allocated to product A. (il) if the company adopts traditional method of overheads allocation, which criterion would you choose to absorb the overheads. Further, determine the overheads allocated to product A (per unit) using the traditional method
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