Question
ue.2. ABC Company manufactures two major products Juice and Milkshake with the following information: Direct materials cost per unit (OMR) Direct labor cost per unit(OMR)
ue.2. ABC Company manufactures two major products Juice and Milkshake with the following information: Direct materials cost per unit (OMR) Direct labor cost per unit(OMR) Direct labor hours per unit Number of units produced Juice Milkshake 5.000 7.000 2.000 3.000 1 hour 2 hours 15,000 15,000 Additional information: Juice Milkshake Total Number of Salespersons Number of Customers Number of kilometers driven 100 75 175 950 600 1,550 130,000 120,000 250,000 The business also has overhead costs as follows: Activity Sales Entertainment Travel Total overhead costs Costs per activity (OMR) Cost driver 120,000 Number of Salesperson 150,000 Number of customers 80,000 Number of kilometers driven 350,000 a. Determine the cost per unit of each of the company's two products under Traditional approach (using direct labor hours as the basis for apportionment) and Activity-Based Costing system. (7.5 marks)
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