Question One

The following budgeted information relates to Nega Nega Pls for the forthcoming period

Products

XYI YZT ABW

Sales and production $($units$)50,00040,00030,000$

Selling price $($Kwacha per unit$)459573$

Prime cost $($Kwacha per unit$)328465$

Machine department $($machine hours per unit$)254$

Assembly department $($direct labor hours per unit$)732$

Overheads allocated and apportioned to production departments were as follows

$$ Machine department K$504,000$

$$ Assembly department K$437,000$

The above overheads could be re$-$analyzed into $$cost pools$$ as follows:

Cost pool K$000$ Cost driver Quantity for the period

Machining services $357$ Machine hours $420,000$

Assembly services $318$ Direct labor hours $530,000$

Set$-$up costs $26$ Set$-$ups $520$

Order processing $156$ Customer orders $32,000$

Purchasing $84$ Suppliers$$ orders $11,200$

$941$

You have been provided with the following estimates for the budget period:

Products

XYI YZT ABW

Number of set$-$ups $120200200$

Customer orders $8,0008,00016,000$

Suppliers$$ orders $3,0004,0004,200$

Required

Prepare and present budgeted profit statements using

a$)$ Absorption costing

b$)$ Activity based costing

Total $(30$ Marks$)$