Question
Two products A and B are made using similar equipment and methods. The data for last period are: Product A Product B Units produced 6
Two products A and B are made using similar equipment and methods. The data for last period are: Product A Product B Units produced 6 000 8 000 Labour hours per unit 1 2 Machine hours per unit 4 2 Set-ups in period 15 45 Orders handled in the period 12 60 Overheads for period $ Relating to production set-ups 179 000 Relating to order handling 30 000 Relating to machine activity 55 000 264 000 Calculate the overheads to be absorbed per unit of each product based on: An ABC approach using suitable cost drivers the answer provide for this question is not very accurate as based on the breakdown the figure/dollar amount are incorrect.
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