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UniTech LLC is specialized in producing high range of mobile, tablet and laptop. These products use the same raw materials, though the quantity differs. Details

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UniTech LLC is specialized in producing high range of mobile, tablet and laptop. These products use the same raw materials, though the quantity differs. Details of quantity required to produce each unit is provided as given below:- Prime Cost Detail:- (RO 25,00 per unit on direct materials and RO 15.00 per unit on direct labour paid for mobile, RO 35.00 per unit on direct materials and RO 25.00 per unit on direct labour paid for tablet. RO 45.00 per unit on component materials and RO 35.00 per unit on direct labour paid for laptop. Production Details: - The budgeted production for a year of three products is 10,000 mobile, 5,000 tablets, and 7,000 laptops. Overheads, Activity and Cost Driver Details: - o The labour hour per units 0.30 for mobile; 0.45 for tablet; and 1.00 for laptop 6. The procurement costs incurred RO 40,000. Number of purchase order 250 times for mobile; 200 times for tablet: 400 times for laptop (in The machine set-up costs incurred RO 15,000, No. of machine set-up for mobile 45 times, tablets 55 times and laptop 65 times 40) The machine running costs incurred RO 32,000. Machine running hours per unit is 0.20 hours for mobile, 0.30 hours for laptop and 0.30 hours for tablet. After sales services cost incurred 15,000. No. of visits customer made 80 times for mobiles, 60 times for tablets and 40 times for laptops. For many years, the company has been using absorption costing for allocating overheads. The basis of allocation used was the total labor hours. Now company ask you make compare with ABC system to switch over it if it is beneficial. Requirements: - 1. Calculate total cost and cost per unit of each product by applying absorption costing. 15 Marks 2. Calculate the total cost and cost per unit of each product by applying ABC system 15 Marks 3. Calculate the selling price by adding 30% mark up on cost for all products. Also, analyze over costing and under costing for all products. 12.5 +2.5

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