3. Babes Company accumulated the following cost information for it two products, BB and CC. Product BB Product CC Production volume Total direct labor hours 2,000 5,000 P1,000 1,000 20,000 P2,000 Set up cost per batch Batch size 100 50 Total setup cost incurred Direct labor hour cost per unit P20,000 P40,000 2 1 A traditional costing system would allocate setup costs on the basis of direct labor hours. An ABC system would trace costs by spreading the cost per batch over the units in a batch. What is the setup cost per unit of Product BB under each costing system? Traditional Costing P 4.80 P 2.40 ABC P40.00 P10.00 P10.00 P20.00 a. b. P10.00 P 4.80 c. d.
3. Babes Company accumulated the following cost information for it two products, BB and CC. Product BB Product CC Production volume Total direct labor hours 2,000 5,000 P1,000 1,000 20,000 P2,000 Set up cost per batch Batch size 100 50 Total setup cost incurred Direct labor hour cost per unit P20,000 P40,000 2 1 A traditional costing system would allocate setup costs on the basis of direct labor hours. An ABC system would trace costs by spreading the cost per batch over the units in a batch. What is the setup cost per unit of Product BB under each costing system? Traditional Costing P 4.80 P 2.40 ABC P40.00 P10.00 P10.00 P20.00 a. b. P10.00 P 4.80 c. d.
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 14EA: Cool Pool has these costs associated with production of 20,000 units of accessory products: direct...
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