Question
Q-4: Al Hamd associate manufactures two types of product X & Y and applies manufacturing overhead to all units on the basis of machine
Q-4: Al Hamd associate manufactures two types of product X & Y and applies manufacturing overhead to all units on the basis of machine hour. Production information follows: Anticipated volume (Units) Direct materials cost Direct labor cost Product X 16,000 R$70 Product Y 30,000 Rs120 Rs40 Rs40 The controller, who is studying the use of ABC, has determined that the firm's overhead can be identified with three activities: Activity Manufacturing setup Cost driver Number of setups Machine processing Product shipping Machine hours Outgoing shipments The activities and their respective cost drivers are as follows: Setups Machine hours Outgoing shipments Product X 100 32,000 200 Product Y 60 45,000 150 The firm total overhead of Rs.6,160,000 is subdivided as follows: Manufacturing setup Required: Machine processing Product shipping Total Rs.1,344,000 Rs.3,696,000 Rs.1,120,000 Rs.6,160,000 Total 160 77,000 350 A. Compute the total cost of product X and Y by using company's current overhead costing procedure. B. Compute the total cost of product X and Y by using Activity based costing.
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