Question C
ABC Company has been traditionally allocating indirect costs based on budgeted labor hours. ABC's total indirect costs amounted to INR ABC produces three products, X Y and Z Key production and sales details associated with the three products are as follows:
tableABCDirect Material DMDirect Labor DLDM Rate puDL Rate per hour,Setup hours,Kw HrsUnits sold,Selling Price pu
ABC Inc. decided to shift to an Activity Based Cost allocation method. A breakup of the indirect costs and their drivers is provided in the below given table.
tableCost,DriverMachine SetupSet up TimeMaterial Handling,DM UnitsElectricityKw HrsQuality Control,Sales Value
Find the profit for each product based on both traditional approach and activitybased approach to allocating indirect cost to products. Show all the workings
