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Question 3 Technical Engineering company LLC started manufacturing of some special products in batches by using certain marketing expenses. The products are produced in batches
Question 3 Technical Engineering company LLC started manufacturing of some special products in batches by using certain marketing expenses. The products are produced in batches in a single manufacturing facility. As each batch is completed, a sample of the units is inspected for quality and tolerances, which is followed by marketing of the goods. Costs have been assigned as follows. Cost pool Engineering OMR 8,500 Setups OMR 7,600 Labour OMR 5,500 Inspection OMR 7,400 Factory Lease OMR 4,200 Factory Utilities OMR 1,200 Advertising Effects OMR 4,400 Training OMR 8,000 Industrial Relations OMR 4,160 Demand creation OMR 4,200 Maintenance of Leaves OMR 8,800 Settlement of Industrial Disputes OMR 7,200 The following activity drivers have been identified and their capacities determined Activity Driver Practical Capacity Labour Hours... 500 Setup Hours...200 Engineering hours.. 250 Inspection hours .. 600 Machine hours .. 1,000 Number of employees ................. 800 Percentage increase in sales . 1,100 The cost of the facility-level activities is assigned using machine hours. Required Create homogeneous cost pools. Identify the activities that belong to each pool and the
activity driver that will be used for computing pool rates. (10 Marks)
(10 Marks, Word Limit 200-600) Question 3 Technical Engineering company LLC started manufacturing of some special products in batches by using certain marketing expenses. The products are produced in batches in a single manufacturing facility. As each batch is completed, a sample of the units is inspected for quality and tolerances, which is followed by marketing of the goods. Costs have been assigned as follows. Cost pool Engineering OMR 8,500 Setups OMR 7,600 Labour OMR 5.500 Inspection OMR 7.400 Factory Lease OMR 4,200 Factory Utilities on OMR 1.200 Advertising Effects OMR 4,400 Training OMR 8,000 Industrial Relations OMR 4,160 Page - 2. of 5 Demand creation OMR 4,200 Maintenance of Leaves OMR 8.800 Settlement of Industrial Disputes OMR 7,200 The following activity drivers have been identified and their capacities determined Activity Driver Practical Capacity Labour Hours 500 Setup Hours..... 200 Engineering hours 250 Inspection hours ................. 600 Machine hours.............. 1,000 Number of employees............... 800 Percentage increase in sales .... 1,100 The cost of the facility-level activities is assigned using machine hours. Required Create homogeneous cost pools. Identify the activities that belong to each pool and the activity driver that will be used for computing pool rates. (10 Marks) Question 4 Central Trading LIL, Oman operates in three countries UAE, India and Oman, which sells three branded products named as pea, pencil and eraser. The budget committee meals a sales budget for the next three months July, August and September are as follows: Product UAE India Pencil 1.00,000 30,000 Pen 80.000 65.000 70,000 80,000 40.000 45,000 40,000 Actual sales units for the current year based on actual sales to the date and estimated sales for the balance of the year are Product UAE India Oman Pencil 70,000 50,000 70,000Step by Step Solution
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