The ABC Company manufactures two products, Product Alpha and Product Beta. Both are produced in a very labour-intensive environment and use similar processes. Alpha and Beta differ by volume. Beta is a high-volume product, while Alpha is a low-volume product. Details of product inputs, outputs and the costs of activities are as follows: Direct labour Annual output hours/unit Number of purchase orders Number of set-ups (units) Alpha 5 1,200 75 40 Beta 5 12,000 85 60 160 100 Fixed overhead costs amount to a total of $420,000 and have been analysed as follows: Volume-related 100,000 Purchasing related Set-up related 145,000 175,000 Using a traditional method of overhead absorption based on labour hours, what is the overhead cost per unit for each unit of product Alpha? (2 d.p.)

The ABC Company manufactures two products, Product Alpha and Product Beta. Both are produced in a very labour-intensive environment and use similar processes. Alpha and Beta differ by volume. Beta is a high-volume product, while Alpha is a low-volume product. Details of product inputs, outputs and the costs of activities are as follows: Direct labour Annual output hours/unit Number of purchase orders Number of set-ups (units) Alpha 5 1,200 75 40 Beta 5 12,000 85 60 160 100 Fixed overhead costs amount to a total of $420,000 and have been analysed as follows: Volume-related 100,000 Purchasing related Set-up related 145,000 175,000 Using a traditional method of overhead absorption based on labour hours, what is the overhead cost per unit for each unit of product Alpha? (2 d.p.)

Name: The ABC Company manufactures two products, Product Alpha and Product
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Description: The ABC Company manufactures two products, Product Alpha and Product Beta. Both areproduced in a very labour-intensive environment and use similar processes. Alpha and Betadiffer by volume. Beta is a high-volume product, while Alpha is a low-volume

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EB: Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following...

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