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Question 1: XYZ Electronics manufactures two large-screen smart television models: the Elite which sells for OMR 2400 and a new model, the Superior, which sells
Question 1: XYZ Electronics manufactures two large-screen smart television models: the Elite which sells for OMR 2400 and a new model, the Superior, which sells for OMR 2000. Annual production is 40,000 units for the Elite and 30,000 units for the Superior. The company's managers identified five activity cost pools and related cost drivers and accumulated overhead by cost pool as follows. Activity Estimated Overhead Cost Cost Driver Expected Use of Cost Driver Per Television Expected Use of Cost Drivers Activity-Based Overhead Rates Purchasing Machine setups Machining Quality control Number of orders 1750,000 OMR Number of setups 600 000 OMR Machine hours 3.100.000 OMR Number of inspections 450,000 OMR 50000 30000 100000 5000 15 20 31 90 Elite Superior 20,000 30,000 15,000 15 000 40,000 2.000 3,000 60,000 Requirements: 1. Prepare a schedule assigning each activity's overhead cost to the two televisions using Activity Based Costing. (Rubrics: 0.5 mark each for correct answer including the calculations and workingx. for 8 items - Total 4 marks) 2. Compute the overhead cost per unit for each product. (Rubrics: I mark each for correct answer including the calculations and workings, for I item - Total marks) 3. Comment on the comparative overhead cost per unit. (Rubrics: 1.5 mark for the correct comparative analysis using evidence from the provided answer in Q3. Total 1 mark)
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