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Please show me workings... 4. Berodua pic assembles three types of motorcar at the same factory: the 600cc Mira the 1000cc Kelira and the 1300cc
Please show me workings...
4. Berodua pic assembles three types of motorcar at the same factory: the 600cc Mira the 1000cc Kelira and the 1300cc Mighty. It sells the motorcars throughout the ome country Historically, the company has allocated all overhead costs using total machine hours but is now considering introducing Activity Based Costing (ABC). Berodua ple's accountant has produced the following analysis. Selling price($ Raw material Annual output (units) Annual direct labour hours 1 10,000 90,000 280,000 cost per unit) 2.500 3,600 per unit) 25,000 30,000 50,000 Mira2,500 Kelira 1,800 Mighty -4,000 The cost drivers that generate overheads are: Deliveries to distributors-the number of deliveries of motorcars to distributors showrooms. Set-ups - the number of times the assembly line process is re-set to accommodate a production run of a different type of motorcar Purchase orders-the number of purchase orders. Spare parts-the number of spare parts The annual cost driver volumes relating to each activity and for each type of motorcar are as follows Number of deliveries Number of Number of Number Number to distributors set ups purchase orders of spare o parts machine hours 100 90 180 370 Mira Kelira 40 35 70450 7,000 250,000 300 4.000 150,000 250| 2,500| 80,000 Total The annual overhead costs relating to these activities are as follows: 1,000 13,500 480,000 145 $ 7.400,000 $ 8,000,000 $ 5,600,000 $ 3,000,000 $4,800,000 $ 28,800,000 Deliveries to distributors Set-up costs Purchase orders Spare parts Machine time Total All direct labour is paid at $5 per hour. The company holds no stocksStep by Step Solution
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