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Pakistan clicks ltd has been struggling with their product cost. The management has hired a cost manager who has suggested to move from traditional costing

Pakistan clicks ltd has been struggling with their product cost. The management has hired a cost manager who has suggested to move from traditional costing to modern costing and thus, compiling the following data to be used in activity-based costing.

Activity

Budgeted overhead cost

Activity driver

Budgeted level for activity driver

Cost per unit of activity driver

Machine setups

300000

Not of setups

100

3000 per setup

Material handling

150000

Weight of raw material

5000 kilograms

3 per kilogram

Hazardous waste control

75000

Weight of hazardous chemical used

10000 kilograms

7.5 per kilogram

Quality control

112500

No of inspections

1000

112.5 per inspection

Other overhead costs

300000

Machine hours

20000

15 per machine hour

Total

937500

Calculate the unit cost of a production order for 100 specially coated plates used in film development. In addition, direct material cost PKR 180 per plate and direct labor costing PKR 60 per plate, the order requires the following. An order of 1000 boxes of film development chemicals has the following production requirements:

Machine setups

9 setups

Raw Material

100000 kilograms

hazardous chemical

2000 kilograms

Inspections

10 inspections

Machine hours

500 machine hours

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