Question 4

Mazni and her costs analysts prepared the following projections relating to the SUW division for the last two-quarters of 2022: Sweatpants Sports-tops Athleisure Expected Sales (units) 180 360 600 Direct Labour Hours (DLH) 720 1,080 3,000 RM RM RM Revenue 30,780 83,520 90,000 Direct Material 3.150 2,520 21,000 Direct Labour 3,600 5,400 15,000 Manufacturing Overhead 8,640 12,960 36,000 An analysis on the manufacturing overhead costs further reveals the following activities: Estimated Overhead Time Spent Activities RM (hours) Receiving 11,430 7,620 Scheduling 950 2,400 Set-up 100 100 Data processing 2,280 2,400 Fabrication 36,000 4,800 Quality inspection 1,140 480 Packing and shipping 5,700 4,800 RM57,600Mazni believes that in shifting the traditional costing system to the activity-based costing (ABC) system, managers will be able to increase their awareness of the activities performed by the company in its production and support activities. Together with SUW Production Manager, her the analysts were able to draft the expected use of activities for each product line as follows: Activities Cost Drivers Sweatpants Sports-tops Athleisure Receiving metres 900 720 6,000 Scheduling number of orders 60 120 200 Set-up number of setups 3 6 Data processing number of orders 60 120 200 Fabrication machine hours 720 1,080 3,000 Quality inspection number of inspections 18 36 60 Packing and shipping finished units 180 360 600