(b) Lamu Ltd. recently introduced an Activity Based Costing (ABC) system. You are provided with the following information: 4. 5. 6. The cost posts identified are: parts; administration. (iii) (iv) The cost driven identified for each cost-pool respectively are: number of parts; maintenance hours; number of material requisitions and number of labour hours. Costs for each of the pool and expected levels of activity for each pool are as summarized below: Cost pool Parts Maintenance Stores Admin. Required: maintenance; store and Total overhead Sh. 10,000 18,000 8,000 5,000 An order has been received for product x-3. Its production requires 80 parts; 250 maintenance hours; 120 material requisitions and 300 labour hours. Cost driven Qty 500 6,000 20,000 4,000 Using ABC approach, compute the cost of this order Determine the selling price per unit if the company is to earn a margin of 20%.

(b) Lamu Ltd. recently introduced an Activity Based Costing (ABC) system. You are provided with the following information: 4. 5. 6. The cost posts identified are: parts; administration. (iii) (iv) The cost driven identified for each cost-pool respectively are: number of parts; maintenance hours; number of material requisitions and number of labour hours. Costs for each of the pool and expected levels of activity for each pool are as summarized below: Cost pool Parts Maintenance Stores Admin. Required: maintenance; store and Total overhead Sh. 10,000 18,000 8,000 5,000 An order has been received for product x-3. Its production requires 80 parts; 250 maintenance hours; 120 material requisitions and 300 labour hours. Cost driven Qty 500 6,000 20,000 4,000 Using ABC approach, compute the cost of this order Determine the selling price per unit if the company is to earn a margin of 20%.

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Description: Do not give answer in image (b)Lamu Ltd. recently introduced an Activity Based Costing (ABC) system. Youare provided with the following information:5.6.The costcost posts identified are: parts; maintenance; store andadministration.(iii)The cost drive

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 9MC: Which is not a step In activity-based costing? A. identify the activities performed by the...

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(i) Select a suitable cost driver for each item of overhead expenses and calculate thecost per unit of cost driver.(ii) Using the concept of Activity Based Costing, compute the factory cost per unit ofeach product.
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