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QUESTION 2mm (25 MARKS) Aman Techno has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead
QUESTION 2mm (25 MARKS) Aman Techno has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, CUTIE and PIE, about which it has provided the following data: Direct materials per unit CUTIE RM30.40 PIE RM45.20 Direct labor per unit RM1.10 RM23.10 Direct labor-hours per unit 0.10 hours 2.10 hours Annual production (units) 35,000 15,000 The company's estimated total manufacturing overhead for the year is RM1,155,000 and the company's estimated total direct labor-hours for the year is 35,000 hours. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activity Cost Pool Estimated Overhead Cost Expected Activity CUTIE PIE Total Assembling products (DLHs) RM 140,000 3,500 31,500 35,000 Preparing batches (batches) RM 241,150 560 1,295 1,855 Axial milling (Machine Hours) Total RM 766,500 1,540 1,015 2,555 RM1,147,650
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