Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 3 2 - Try Try This? PJ Co traditionally uses absorption costing to cost their products but are thinking of switching to activity based
Question 3 2 - Try Try This? PJ Co traditionally uses absorption costing to cost their products but are thinking of switching to activity based budgeting. As a Consequence the following information relating to the budget for the year ahead has been collected. Production Overhead Cost Budget Post Exar R Machining costs 380,000 Set-up costs 258,500 Purchasing costs 340,000 Total production overheads 978,500 The following table shows the total budgeted activities of the company (it manufactures many different types of products) and the details relating to the manufacture of two product lines: L and M. Data Machine hours Number of production runs Purchase orders Production quantities of L&M Total 95,000 235 5,000 Product 1 2 per unit 20 100 5,000 units Product M 1 per unit 5 100 20,000 units Required: Kalculate, using activity based costing, the production overhead costs that would be attributed to one unit of Production L and one unit of Product M. (10 marks
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started