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Question 1 A manufacturing company has two Divisions: Amateur and Pro. Estimated activity for the next year is: Company Total (AmateurPro) Amateur Pro Division Division
Question 1 A manufacturing company has two Divisions: Amateur and Pro. Estimated activity for the next year is: Company Total (AmateurPro) Amateur Pro Division Division 1,000 brs 600 brs Direct Labour hours: Maching Hours: Units Produced: 9,000 brs 2,700 bts 10,000 brs 3,300 brs 800 units 100 units 900 units Production Batches: 1 batch 49 batches 50 batches $144,000 $ 7,500 33.000 $184,500 Costs: Labour: Set-ups Machining: Total costs Other information: continual basis throughout the year demand employees The Amateur division makes products on a The Pro division makes products in batches based on Both divisions use the same machines and the same There are no materials A set-up is required for each production batch Machining costs are allocated based on Machine hours Required A. What is the cost of a unit for each of the Amateur and Pro Divisions, assuming that total costs are captured in a single cost pool allocated on the basis of Direct Labour Costs (ie, no ABC)? B. What is the cost of a unit for each of the Amateur and Pro Divisions, assuming that the company uses Activity Based Costing
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