Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Super Discmakers produces two types of computer storage drives, called Disc A and Disc B. The firm's accountant has compiled the following information: Disc A

image text in transcribed
Super Discmakers produces two types of computer storage drives, called Disc A and Disc B. The firm's accountant has compiled the following information: Disc A Disc B Total labour hours used (hours) 10,000 5,000 Total machine hours used (hours) 5,000 10,000 Units produced 1,000 250 The total overhead manufacturing costs amounted to RM600,000. Find: a. i. The labour hours used by each unit of Disc A and Disc B ii. The machine hours used by each unit of Disc B b. i.The overhead costs absorbed by each unit of Disc A and Disc B, assuming the overhead cost allocation was based on labour hours. ii The overhead costs absorbed by each unit of Disc A and Disc B, assuming the overhead cost allocation was based on machine hours c. Super Discmakers has traditionally used labour hours to allocate its manufacturing overhead costs to the products. The management has decided to invest in upgrading the machinery and automating the operations as much as possible, in line with the industry trends. You are interning at Super Discmakers and over lunch the engineering manager explains that Super Discmakers would reduce its dependence on labour over time, and asks you which of the overhead cost allocation bases would be better. Prepare a reply. You must decide which of the two bases discussed above would be suitable, and explain your choice. [1 +2 = 3 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sound Investing, Chapter 7 - Cash Versus Accrual

Authors: Kate Mooney

1st Edition

0071719296, 9780071719292

More Books

Students also viewed these Accounting questions