Following are the particulars of an industry manufacturing two products A and B : Produts Output in units Machine hours (MH) Production runs No.of…
BBS Cost and Management Accounting · 2080 · Solved Question with Answer
Following are the particulars of an industry manufacturing two products A and B :
| Produts | Output in units | Machine hours (MH) | Production runs | No.of orders | Prime Cost (Rs.) |
| A | 15,000 | 2,000 | 20 | 60 | 110,000 |
| B | 20,000 | 3,000 | 40 | 90 | 90,000 |
The overhead cost and cost drivers are as follows:
| Activities | Cost drivers | Overheads |
| Maintenance Cost | Machine hours | Rs 250,000 |
| Set up cost | No.of production runs | Rs. 300,000 |
| Procurement Cost | No.of order executed | Rs 300,000 |
Required: Cost per unit under Conventional method using MH and Activity Based Costing [10 ]