Help on Traditional absorption costing! I don’t know how to solve… Help on Traditional
Help on Traditional absorption costing! I don’t know how to solve… Help on Traditional absorption costing! I don’t know how to solve these practice questions… These questions are only based on the traditional absorption costing part… Q1Joetows Company manufactures and sells two Models of Laser Photocopy Machines, P1 and P2. It sells P1 for $2,000 and P2 for $2,500 each. According to the marketing department’s report, the sales agents sell P2 very quickly but struggle to sell any P1. They have invited a management accountant consultant to review their current costing and pricing policies. The management accountant consultant recommends reducing the sale price of P1 and increasing the sale price of P2. The company currently uses traditional costing systems. It used the number of productions to allocate overhead costs. Using traditional absorption costing and activity-based costing (ABC) to determine, the accurate production costs for these two products and express your view regarding the recommendation made by the consultant. The available information concerning the last month’s operations appears below: From the centre’s management information system, you extract the following information on activities, costs, and activity drivers for the current period: Image transcription textP1 P2 Units produced 19,283 9,251 Materials: Number of parts 12 23 Price part per part $36 $51 Direct labourThe time needed per unit (minutes) 14 27 Labour hour rate $21 $26 Activity Expected Cost Machine set-up$15,433 Materials ordering $519,264 Machine hours $341,992 Injection moulding $11,940 No of Pr… Show more… Show more QUESTIONSHow many are the total units (accounted for)?How much is the overhead rate per unit for P1 under current traditional costing? – 64? (not sure)How much is the overhead rate per unit for P2 under current traditional costing?How much is the full product cost per unit for P1 under current traditional costing?How much is the full product cost per unit for P2 under current traditional costing? 1,134 ? (not sure) Accounting Business Managerial Accounting ACCOUNTING 221 Share QuestionEmailCopy link
