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Section A (10 marks) JV Led manufactures three lines of TV monitors : M101 , M102 and M103 . JV currently uses a Volume Based
Section A (10 marks) JV Led manufactures three lines of TV monitors : M101 , M102 and M103 . JV currently uses a Volume Based Costing (VBC ) system and uses the number of monitors produced as a cost allocation base . The CFO is contemplating changing to an Activity Based Costing (ABC ) system The following information has been provided for the month of June 2013 : er VBC information M101 M102 M103 Total Number of monitors produced 800 600 500 2,000 $ Prime costs 710,000.00 660,000.00 780,000.00 2,150,000.00 Manufacturing overhead cost 75,600.00 56,700.00 56,700.00 189,000.00 Total Manufacturing Cost 785,600.00 716,700.00 836,700.00 2,339,000.00 Cost per unit $982.00 $1,194.50 $1,394.50 Activity cost information : Activities Activity Drivers Activity Costs Assembling monitors # Monitors $150,000 Settling monitor # Production runs $ 39,000 Distribution # Deliveries $ 14,500 Activity Drivers relating to the above activity pools are as follows : Activity Drivers Consumed M101 M102 M103 Total # Monitor 800 600 500 2000 # Production runs 16 12 12 40 # Deliveries 4 3 3 10 Required : 1. Using ABC , calculate the cost for one unit of M101 . Show your workings . (5 marks ) CT25 A
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