Question 3Study the information provided below and calculate thefollowing:3.1 Manufacturing costs per unit for each product using thetraditional absorption costing system (6 marks)3.2 Manufacturing overheads cost per unit for each product usingthe ABC system. (14 marks)
Question 3 Study The Information Provided Below And Calculate The Following 3 1 Manufacturing Costs Per Unit For Each P 1 (26.86 KiB) Viewed 13 times
INFORMATION Matrix Ltd manufactures two products, viz. Product A and Product B. The company operated an absorption costing system gathering all the overheads in a single cost centre and allocated it to products using direct labour as the allocation basis. The enterprise intends implementing the Activity-Based Costing (ABC) system. The budgeted information for 2022 is as follows: Direct materials cost Direct labour cost Overheads: Materials handling Quality control Materials procurement Other overheads Product A R 400 000 500 000 Product B R 800 000 1 500 000 Total R 1 200 000 2 000 000 3 500 000 300 000 200 000 500 000 2 500 000
Units manufactured Number of inspections Materials movements Number of orders Product A 10 000 150 120 40 Other overheads are allocated to individual products based on direct labour costs. Product B 50 000 100 180 160 Total 60 000 250 300 200
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