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CoursHeroTranscribedText: Question 3 Bradley Ltd. is a small company which manufactures cricket bats. For a...

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CoursHeroTranscribedText: Question 3 Bradley Ltd. is a small company which manufactures cricket bats. For a number of years, the management accountant has dealt with the recovery of overheads in a traditional manner based on absorption costing principles The business has three major production cost centres: shaping, finishing, and packing. PART A The traditional costing method has produced the following figures for period ended June2003: Cost centre Shaping Finishing Packing Overhead $75,000 $30,000 $17,500 Machine hours 12,000 6,500 Direct labour hours 3,300 Overhead recovery rates per $6.25 $4.62 $5.30 machine hour of labour A new product The Driver is estimated to take the following hours to produce per unit: Shaping 3.50 Finishing 1.60 Packing 0.30 5.40 hours The management accountant together with the production manager agrees the following predetermined costs per unit for The Driver: Direct Material $17.50 Direct labour 3,300 hours Required: Calculate the unit cost of The Driver using the company's traditional, absorption costing method. (10 marks)

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