22. Answer-16…. 3/2*3=4.5 8*256.18/7000=0.29 4*192/ 7000=0.11 12*280.74/7000=0.48 4*716.67/ 7000=0.41 1*.3=Rs.3 2*256.18/ 600=0.85 1*92/600= 0.32 3*280.74/ 600=1.40 1*716.67/ 600=1.19 ¼*3=0.75 6*256.18/ 5000=0.31 4*192/5000=0.15 10*280.7/ 5000=0.56 5*716.67/ 5000=0.72 ¼*Rs.3=.0.75 1*256.18/500=0.51 1*192/500= 0.38 2*280.74/ 500=1.12 2*716.67/500= 2.87 Machine overhead Setup cost Material Ordering cost Material handling cost Spare parts cost D C B A Overhead items
23. traditional system does not make correct assumptions that all overheads are Related to volume and machine time. Under traditional system products A and C are under costed because it misallocates costs for small volume products. Set ups Rs. 0.51 0.31 0.85 0.29 +4.43 +1.29 +1.96 -1.41 1.20 1.20 4.80 7.20 5.63 2.49 6.76 5.79 2.87 0.72 1.19 0.41 1.12 0.56 1.40 0.48 0.38 0.15 0.32 0.11 0.75 0.75 3.00 4.50 A B C D difference Total (old system) Total (ABC systems) Spare Parts Material handling Material ordering Machine overheads products
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30. 5000 4000 600 14346 16094 1494 36534 7.31 15000 6000 5760 13243 24141 4482 53626 3.58 Units Direct materials cost Direct labour cost Receiving /sores cost(48*275.89) (52*275.89) Production runs/set up cost (36* 670.59) (24*670.59) Inspection cost (30* 149.41) (10* 149.41) Total cost of products Cost per unit Q P Particulars
31. Computation of sales value per quarter of component K(Activitity based costing) 3000 7500 12000 1800 5518 4024 3586 34428 8607 43035 14.34 Units Components of initial design(Rs.60000/8) Direct materials cost Direct labour cost (300 hours 8 Rs.6) Receiving /sores cost(20*275.89)) Production runs/set up cost (6* 670.59) Inspection cost (24* 149.41) Total cost of products Add: Mark up( 25% of cost) Sales value Selling price per unit of K(43035/3000 units) K Particulars
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