60.1K

Verified Solution

Link Copied!

Can someone help me with these solutions detailed?

2) Part A The XYZ Company produces two types of batteries, a regular model and a premium model. Using the traditional costing system, the company allocates manufacturing overheads on the basis of labour hours worked. The following information has been supplied by the company: Regular Model Premium Model Direct Materials $ 100,000 $ 150,000 Direct Labour $50,000 $ 75,000 Machine Hours Worked 5,000 10,000 Labour hours Worked 10,000 15,000 Quality Inspection Hours 1,000 1,500 Manufacturing Overheads are as follows: Indirect Materials Indirect Labour Other Overheads $ 45,000 $ 50,000 $ 30,000 Required: Compute the total Manufacturing costs for each model of battery. The XYZ Company produces two types of batteries, a regular model and a premium model. Using the traditional costing system, the company allocates manufacturing overheads on the basis of labour hours worked The following information has been supplied by the company: Regular Model Premium Model Direct Materials $ 100,000 $ 150,000 Direct Labour $ 50,000 $ 75,000 Machine Hours Worked 5,000 10,000 Labour hours Worked 10,000 15,000 Quality Inspection Hours 1,000 1,500 Manufacturing Overheads are as follows: Indirect Materials $ 45,000 Indirect Labour $ 50,000 Other Overheads $ 30,000 1 Part B The company decides to use the ABC method of costing to obtain more accurate cost information and the following additional information is supplied. a) Indirect Materials is to be allocated on the basis of Machine Hours Worked b) Indirect Labour is to be allocated on the basis of Labour Hours Worked c) Other Overheads are to be allocated on the basis of Quality Inspection Hours. Required: a) Compute the total manufacturing cost of each model using the ABC system 20 Marks

Answer & Explanation Solved by verified expert

See Answer