Answer Happy

THIS INFORMATION IS FOR QUESTIONS SIX, SEVEN AND EIGHT Kaulu Ltd produces two types of cars X and Y.The company uses absorption costing system. The following budgeted information has been provided for the two cars. Х Y Budgeted Production (Units) 1,100 1,100 Variable cost s per unit K30,000 K32,000 Machine hours to produce one car 200 200 Total budgeted machine hours 220,000 480,000 The fixed production overhead of K26,020,000 is not product specific and is absorbed using a machine hour rate. The Jolly Ltd is considering changing to activity based costing system.Budgeted fixed production overhead costs have been analysed as follows: K'000 Machining costs 7,000 Setup costs 12,000 Quality Inspection 7,020 Analysis have also revealed the following information Х Y Cars per Production Run 10 40 Number of inspections per production run 20 80

QUESTION SIX (5 Marks) What is the total cost of Car X using absorption costing?-- QUESTION SEVEN What is the overhead cost per inspection using Activity Based Costing? (5 Marks) QUESTION EIGHT (5 Marks) What is the setup cost per unit of car Y using Activity Based Costing?-