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Star Boyee limited produces three products using a two-stage production system. The following cost has been collected by the cost accountant for the month ending

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Star Boyee limited produces three products using a two-stage production system. The following cost has been collected by the cost accountant for the month ending June 2018, Product X Y z GHE GHC GHE Direct Material 200 300 100 Direct Labour 1,250 1.040 900 The following cost was incurred at the various stages of production: Process Stages 1 Stages 2 GH GHC Production set up 500 600 Ordering 400 Quality control 300 100 Material handling 800 400 Machining cost 200 150 Ordering cost 100 250 Total 2.300 1,800 300 Analysis of the various activities revealed the following: Product X Y Number of setups 10 15 Number of order received 5 15 Number of inspections 4 6 Number of orders placed 20 30 Number of requisition 10 5 Machine operating hours 100 80 Number of units produced 300 400 Labour operating hours 100 z 30 30 10 20 10 120 600 75 150 Stage 1 process is capital intensive and recorded 300 machine hours during the month, whereas stage 2 process is labour intensive process, recorded 320 labour hours. Required: Page 1 of 1 Calculate the product cost per unit for each produet using: a. The traditional overheads analysis approach. [10 marks] b. Activity Based Costing approach [15 marks! Total marks 25 marks

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