The following information relating to the our products made and sold by a company for one period.
Product
A B C D
Outputs
$ per unit $ per unit $ per unit $ per unit
Direct material
Direct labour
Machine hors per unit
The four products are similar and are usually produced in production runs of units and sold in batches of units.
The total of the production overhead for the period has been analyzed as follows:
Machine department costs rentbusiness rates,Depreciation and supervion
Set up costs
Stores receiving
Inspectionquality control
Materials handling and dispatch
Total
You have ascertained that the cost drivers to be used in an ABC exercise are as listed below for the overhead costs shown.
Cost pools Cost drivers
Set up cost Number of production runs
Stores receiving Requisition raised
Inspectionquality control Number of production runs
Materials handling and dispatch Orders executed
The number of requisitions raised on the stores was for each product,and the number of orders executed waseach order being for a batch of of a product.
Required :
Calculate the production costs per unit, using ABC.
