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Question 3 - 13 marks Valhala Limited manufactures two products: axes and shields. During June, 200 axes and 400 shields were produced and the overhead
Question 3 - 13 marks Valhala Limited manufactures two products: axes and shields. During June, 200 axes and 400 shields were produced and the overhead costs of $62,000 were incurred. The following information related to overhead costs was available: Activity Cost Driver Total Cost Materials handling # of requisitions $ 24,000 Machine setup # of setups $ 18,000 Quality Inspection # of inspections $ 20,000 The cost driver volume for each product was as follows: Cost Driver Axes Shields # of requisitions 300 500 # of setups 140 220 # of inspections 190 310 Total 800 360 500 Required 1 Calculate the overhead activity rate for each activity (3 marks). 2 Assign the manufacturing overhead costs for June to the two products using Activity Based Costing. Calculate the cost per unit for each of the products. Show all your calculations (10 marks)
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