a. Satum, a chocolate manufacturer produces three products: The sky, a bar of solid milk chocolate. The moon, a fondant

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A Satum A Chocolate Manufacturer Produces Three Products The Sky A Bar Of Solid Milk Chocolate The Moon A Fondant 1 (247.75 KiB) Viewed 9 times

a. Satum, a chocolate manufacturer produces three products: The sky, a bar of solid milk chocolate. The moon, a fondant filled milk chocolate. • The sun, a biscuit and nougat based chocolate. Information relating to each of the products is as follows: Direct labour cost per unit (C) Direct material cost per unit (C) Actual production/sales units Direct labour hours per unit Direct machine hours per unit Selling price per unit (C) Annual production overhead C80,000 A Machining costs Component costs Set-up costs Examiner: Hellena Aryee Sky 0.07 0.17 500,000 0.001 0.01 0.50 Sky C 0.001 0.01 3 5,000 15,000 30,000 30,000 80,000 Packing costs Production overhead Cost driver data Labour hours per unit Machine hours per unit Number of production set-ups 4 6 Number of components 25 21 Number of customer orders Required: i. Using traditional absorption costing, calculate the full production cost per unit and the profit per unit for each product. (3 marks) ii. Using ABC, calculate the full production cost per unit and the profit per unit for each product (7 marks) (2.5 marks) iii. Comment on the implications of the figures calculated on either method. sun 0.12 moon 0.14 0.19 0.16 I 150,000 250,000 0.01 0.005 0.04 0.02 0.45 0.55 moon 0.01 0.04 1 sun 0.005 0.02 26 Page 4 20