Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ramos company has identified the following overhea

Ramos Company has identified the following overhead activities, costs, and activity drivers for the coming...

80.2K

Verified Solution

Question

Accounting

image

Ramos Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment RM 120,000 Number of setups 300 Ordering costs 90,000 Number of orders 9,000 Machine costs 210,000 Machine hours 21,000 Receiving 100,000 Receiving hours 5,000 6 Ramos produces two models of dishwashers with the following expected prime costs and activity demands: Direct materials Direct labour Units completed Direct labour hours Number of setups Number of orders Machine hours Receiving hours Model A RM 150,000 RM 120,000 8,000 3,000 200 3,000 12,000 1,500 Model B RM 200,000 RM 120,000 4,000 1,000 100 6,000 9,000 3,500 The company's normal activity is 4,000 direct labour hours. Required: a) b) c) Determine cost per unit for each model using direct labour hours to apply overhead. Determine cost per unit for each model using Activity Based Costing. Which method produces the more accurate cost assignment? Why

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students