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Question 2: (30 marks O'Donovan company manufactures four products which involve ordering materials, setting up machinery and handling production runs. The indirect costs of these
Question 2: (30 marks O'Donovan company manufactures four products which involve ordering materials, setting up machinery and handling production runs. The indirect costs of these activities are shown here below: $ Ordering 35,000 Set-up 50,500 Handling 64,000 Total 149,500 Other information relating to the products is as follows: Products Number of units Number of order Set-ups Handling hours X1 3,000 10 220 80 Y2 900 30 450 80 Z3 3,500 50 750 120 W4 4,600 110 600 120 Required: 1. Prepare a schedule of each activity costs per unit. (9 marks) 2. Calculate the indirect cost per unit to be allocated to each of the four products. (10 marks) B292 / THE-Final3 of 52020-2021/Summer 3. 4. Calculate the activity components costs per unit. (6 marks) Define Activity based management (ABM). (2 marks) Explain how ABM might be implemented in an organization and give examples
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