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A company makes a product in two qualities, 'Prime' and 'Deluxe'. The company had been able to sell these products at a
Posted: Tue Apr 26, 2022 9:44 am
by answerhappygod
- A Company Makes A Product In Two Qualities Prime And Deluxe The Company Had Been Able To Sell These Products At A 1 (81 KiB) Viewed 49 times
A company makes a product in two qualities, 'Prime' and 'Deluxe'. The company had been able to sell these products at a price which gave a standard profit loading of 25 percent of full cost. Management is concerned by the lack of profit. Full cost per unit is calculated by allocating overheads for each type of product on the basis of direct labour hours. The costs are as follows: Prime (RM) Deluxe (RM) Direct labour (at RM5/hour) 20 15 30 20 Direct material The total overheads are RM1,000,000. Over recent years and for the forthcoming year, the company expects to make and sell 40,000 Prime and 10,000 Deluxe. a) Calculate the unit cost of each of the two products on the basis used at present and deduce the current selling price.