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AWW Managerial Accounting Seminar Owestion Riyadh Lad has a single production process for which the following costs have been estimated for the period ending 31 December 2020 SAR 15,600 19.500 13.650 Material receipt and inspection cost Power cost Material handling cost Three products - X, Y and Z are produced by workers who perform a number of operations of SAR4 per hour. on material blanks using hand held electricity powered drills. The workers have a wage rate The following budgeted information has been obtained for the period ending 31 December 2020: ore th Product Z Product X Product Y 800 2,000 1.500 16 10 5 Production quantity (units) Batches of material Data per product unit Direct material (sq metres) Direct material (SAR) 4 6 3 $ 3 6 Direct labour (minutes) 24 40 60 3 Number of power drill operations 6 2 Overhead costs for material receipt and inspection, process power and material building are presently cach absorbed by product units using rates per direct labour hour. An activity-based costing investigation has revealed that the cost drivers for the overhead costs are as follows: Material receipt and inspection number of batches of material. Process power number of power drill operations. Material handling: quantity of material (sq. metres) handled. Course code: ACC 421 Studente You are required: (a) to prepare a summary which shows the budgeted product cost per unit for each of the products X. Y and Z for the period ending 31 December 2020 detailing the unit costs for each cost element: (1) using the existing method for the absorption of overhead costs and (ii) using an approach which recognises the cost drivers revealed in the activity- based costing investigation: (b) to explain the relevance of cost drivers in activity-based costing. Make use of figures from the summary statement prepared in (a) to illustrate your

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