Q5 Ahmad is the cost supervisor at the production department fora bakery store called NUR bakery in Shah Alan. The bakery produces3 types of products namely cupcakes, doughnuts and curry puffs. Thefollowing information relates the bakery operations for the yearending 31 dec 2013
Cost pools
RM
Machining
8000
Set up costs
5500
Packaging
4200
Inspection
2800
Output(units)
machine
Direct material
Direct labour
Cupcakes
500
50 hours
750 kg
150 hours
Doughnuts
300
60 hours
100 kg
60 hours
Curry puffs
200
80 hours
50 kg
40 hour
The direct labour rate is RM 1.5 per hour and the directmaterial costs is RM1.2 per kg. the production manager and the costsupervisor have arrived at the following cost driver basis
Cost pools
Cost driver
Machining
Machine hours
Set up costs
Direct materials (kg)
Packaging
Number of units produced
inspection
Number of units producted
Q5A – Using the ABC approach , calculate the production cost perunit
Q5B – using traditional costing approach compare the cost perunit for each of the products
Q5C – Why is there difference between the traditional and ABCapproach of the calculating the total cost per unit?
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