Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please provide answer step by step in complete detail give me all required answers thanks Q1. Pakistan Office Equipment Corporation manufactures two types of filing
please provide answer step by step in complete detail give me all required answers thanks
Q1. Pakistan Office Equipment Corporation manufactures two types of filing cabinets Portable and VIP- and applies manufacturing overhead to all units at the rate of Rs.80 per machine hour. Production information follows: Portable VIP Direct-material cost Rs.40 Rs.65 Direct-labor cost Rs.25 Rs.25 Budgeted volume 16,000 30,000 (units) The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities three respective cost drivers, follow. Cost Drivers Setups Machine hours Outgoing shipments Portable 100 32,000 200 VIP 60 45,000 150 Total 160 77.000 350 The fim's total overhead of Rs.6.160.000 is subdivided as follows: manufacturing setups, Rs.1,344,000; machine processing, Rs.3.696,000, and product shipping, Rs.1,120,000. Required: 1. Compute the unit manufacturing cost of Portable and VIP filing cabinets by using the company's current overhead costing procedures. 2. Compute the unit manufacturing cost of Portable and VIP filing cabinets by using activity based costing 3. Is the cost of the Portable filing cabinet overstated or understated (i.e., distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how muchStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started