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tave recently been appointed as management accountant to Bragg Ltd. The company manufactures three types of printers. The following details relate to the three products

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tave recently been appointed as management accountant to Bragg Ltd. The company manufactures three types of printers. The following details relate to the three products for the production month of June 2021. Product Laser Dot Matrix Ink Jet Output in units 600 500 600 Total direct material cost 24,000 25,000 36,000 Total direct labour cost 16,800 10,500 1 2,600 Machine hours per unit 4 3 3 The company currently absorbs overheads on the basis of machine hours. The total production overheads for the month were 130,000. The product cost calculated using absorption costing is as follows: Laser Dot Matrix Ink Jet Material 24,000 25,000 36,000 Labour 16,800 10,500 12,600 Overhead 54 744 34 215 41 058 Total cost 95,544 69,715 89,658 Cost per unit 1 59.24 139.43 149.43 Overhead Absorption Rate: Total production overheads 130 000 = 22.81 per machine hour Total Machine Hours 5,700* *total machine hours (600x4)+(500x3)+(600x3) You are considering the introduction of activity based costing and observe that the production overheads are already captured by each cost centre. An analysis of the 130,000 by the percentage attributable to each department is detailed below. You determine the associated cost drivers for each department and their use by each product, which are also included in the table below. You have been advised that each product passes through two machines. The time taken on each machine is detailed below: Laser Dot Matrix Ink Jet t' Minutes Minutes Minutes n '"L Machine A 145 140 100 Machine B g Q Q Acti\\ Total minutes m m m Cost type Percentage of Total Cost Driver Overhead Cost (%) Machine A 32 Machine time Machine B 44 Machine time Set up 10 Number of set ups Reql Quality Inspection Number of inspections Note. Total 1 O

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