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The following information relates to Brunti Inc. for the forthcoming period. Product Product A Product B Product C Sales and production (Units) 55,000 44,000
The following information relates to Brunti Inc. for the forthcoming period. Product Product A Product B Product C Sales and production (Units) 55,000 44,000 33,000 S $ S Selling price (per unit) 49 104 81 Prime cost (per unit) 35 92 71 Hours Hours Hours Machine department 2 5 4 (machine hours per unit) Assembly department 2 (direct Labour hours per unit) Overheads allocated and apportioned to production department (including service cost center cost) were to be recovered in product costs as follows: Machine department at 1.3 per machine hour Assembly department at 0.85 per direct hour You ascertain that the above overheads could be reanalyzed into cost pools as follow: Cost pool Cost driver Quantity for the period Machining services 385,000 $ Machine Hours 420,000 Assembly services Set-up costs Order processing 350,000 $ Direct labour hours $30,000 28,500 Set-ups 520 170,000 Castomer Order 32,000 Purchasing 92,000 Suppliers Onder 11.200 1,025,500 You have also been provided with the following estimates for the periods: Product Product A Product B Product C Number of Set-ups 120 200 200 Customer Order 8,000 8,000 16,000 Suppliers Order 3,000 4,000 4.200 Required: 1- Prepare and present profit statements using a. Traditional costing (5 marks) b. Activity-based costing. (5 marks)
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