What is the answers for (i), (ii)??
See the pics attached
Section 2 continued (ii) Use the ABC Approach to calculate the Total Cost, Profit and Profit % for each product. Evaluate again the profitability of the three products. What recommendations will you now provide to the manager about the three product lines? (15 marks) Basic Moderate Complex Total Cost Activity Activity Total Device Device Device Activity Driver Cost Pool Cost Activity Activity Activity Level Rate Level Level Level Materials No. of material $30,000 100 300 400 Handling Costs purchases Machine set-ups No. of machine $50,000 200 300 500 set-ups Inspection & No. of testing & $34,000 100 300 500 Testing Costs inspections $114,000 ABC Approach Basic Device $ Moderate Device $ Complex Device $ RANK Evaluation of the profitability of the three product linesSection 2: Traditional Overhead Allocation and ABC Costing (25 marks) The Gagan Electronic Products Company (GEPC) manufactures three types of music devices: Basic Device (BC), Moderate Device (MC) and Complex Device (CD). The following income, costs and quantities are budgeted for the coming year: Basic Device Moderate Device Complex Device Quantity Sold 3,000 units 1,000 units 500 units Sales $75,000 $100,000 $175,000 Direct Costs: Direct Material $15,000 $20,000 $35,000 Direct Labour $9,000 $10,000 $19,000 Overhead Costs: 300% of Direct Labour Cost ? ? Under the traditional overhead allocation costing system, the current overhead application rate is 300% of direct labour cost. Show your workings clearly and round any relevant calculations to two decimal places. Required: (i) Use the Traditional Overhead Allocation Costing Approach (300% of direct labour cost) to calculate the Total Cost, Profit and Profit % for each product. Evaluate the profitability of the three products and provide recommendations to Prasad, the manager of the company about the three product lines. (10 marks) Basic Device $ Moderate Device $ |Complex Device $ RANK Evaluation of the profitability of the three product lines