A company has identified the following overhead costs and cost drivers for the coming year:...
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Accounting
A company has identified the following overhead costs and cost drivers for the coming year:
Overhead Item Cost Driver Budgeted Cost (PHP) Budgeted Activity Level
Machine set-up No. of set-ups 20,000 200
Inspection No. of inspections 130,000 6,500
Materials handling No. or material moves 80,000 8,000
Engineering Engineering hours 50,000 1.000
The following information was collected from the two products that were bring produced:
Ching Chong
Direct Materials PHP 12,000 PHP 8,000
Direct Labor PHP 2,000 PHP 4,000
Units completed 50 200
No. of set-ups 2 4
No. of inspections 10 30
No. of material moves 10 50
Engineering hours 50 10
Required:
1. Overhead cost allocated to Ching and Chong
2. Cost per unit of Ching and Chong
3. Selling price per unit of Ching and Chong, assuming a mark-up of 40% of cost.
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