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Zhuhai Drones Factory Limited produced 2 drone models for sales. Model 1 was manufactured by Department A and Model 2 by Department B. Followings are
Zhuhai Drones Factory Limited produced 2 drone models for sales. Model 1 was manufactured by Department A and Model 2 by Department B. Followings are the details relating to the production in the month of June 2019. There were no beginning and ending WIP for June 2019. Details Input Department Department Unit price $50/hour Amount ($) 150,000 A 3,000 100 5.000 2,000 hours 60 3,000 kg. 500 sq. m. 1,000 hours 40 2,000 kg. 500 sq. m. $10/kg. 50,000 80,000 1,000 3,000 90,000 Labour (No. of hours) No. of labour Materials (kg.) Factory rent (sq. m.) Depreciation of machines (No. of machine hours) Utilities expense (sq. m.) Supervisors' salaries (DLH) 1,600 machine hours 1,400 machine hours 1,000 30,000 500 sq. m. 500 sq. m. 10,000 Required: (a) Compute the prime costs of Departments A and B. [4 marks] (b) Compute the factory overhead allocated to Departments A under the simple costing system based on machine hours. [4 marks] (c) Compute the total costs of Departments A and B using activity-based-costing system. [8 marks] (d) State the benefits of using activity-based-costing system. [4 marks]
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