rect Labor Cost per unit $($$$)$

$360$

$180$

Budgeted Volume $($units$)$

$180$

$40\mathrm{.}000$

$75\mathrm{.}000$

The firm$$s calcula on of its manufacturing overhead costs is as follows:

Manufacturing setups

Machine processing

Product shipping

$ $3\mathrm{.}300\mathrm{.}000$

$ $10\mathrm{.}800\mathrm{.}000$

$ $4\mathrm{.}800\mathrm{.}000$

The controller, who is studying the use of ac vity$-$based cos ng$,$ has determined that the

f

irm$$s overhead can be iden fied with three ac vi es: manufacturing setups, machine

processing, and product shipping. Other informa on includes:

$$ Manufacturing setups are done per batch. One batch of ABC is $320$ units, while one

batch of DEF is $2\mathrm{.}000$ units.

$$ The cost driver for machine processing is machine hours. Each ABC product needs $2$

machine hours, while each DEF product needs $60$ minutes of machine hour.

$$ There are $600$ outgoing shipments for ABC and $400$ for DEF.

$1$

At the request of PT Semangka VP of marke ng$,$ the cost management staff has recently

completed customer$-$profitability study. The following ac vity$-$based cos ng informa on was

the basis for analysis:

Customer Related Ac vi es Cost Driver Base Cost Driver Rate $($$$)$

Sales Ac vity

Sales visits

Order Taking

$4\mathrm{.}000$

Purchase orders

Special handling

$800$

Unit handled

Special Shipping

$200$

shipments

$2\mathrm{.}000$

Cost driver data for two of PT Semangka biggest customers for the year $2023,$ customer M and

customer N$,$ are:

Customer Related Ac vi es Customer M

Number of sales visits

Customer N

$20$

Number of purchase orders

$30$

$40$

Number of units handled

$80$

$800$

Number of shipments

$600$

$48$

$80$

The following addi onal informa on has been compiled by PT Semangka for customer M and

customer N$,$ for the year $2023$:

Customer M

Sales Revenue

Customer N

$1\mathrm{.}560\mathrm{.}000$

Cost of Goods Sold

$1\mathrm{.}170\mathrm{.}000$

$640\mathrm{.}000$

General Selling Costs

$480\mathrm{.}000$

$192\mathrm{.}000$

General Administra ve Costs

$144\mathrm{.}000$

$140\mathrm{.}000$

Required:

$128\mathrm{.}000$

$1.$ Compute unit cost using current overhead cos ng procedures! $(8\%)$

$2.$ Compute unit cost using ABC Method! $(12\%)$

$3.$ Compare unit cost per product using current procedure and ABC. Which product has

considered overstated and understated? $(8\%)$

$4.$ Calculate the aggregate amount under$/$overstated by the company using current

procedure and ABC! $(10\%)$

$5.$ Calculate customer related costs and opera ng income for each of PT Semangka biggest

customers. Comment! $(6\%)$

$6.$ When analyzing the high number of sales visits to customer N$,$ the company$$s controller

found out that the Sales Rep for customer N is actually receiving some personal favor

from customer N that resulted in him giving more discount to customer N$.$ The Marke ng

$2$

manager was aware of this but did not report it to his supervisor. Analyse this situa on

from the point of view of the code of ethics. Provide recommenda on for this ma er$,$ for

the company and for related staffs involved. $(6\%)$