Solution-Calculate the profitability for the each product

Calculate the profitability for the each product line

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Reference no: EM132536518

MySpace Inc. produces two main products:

Kenanga and Lily. Table O1shows recent production data related to these products. Table Q1: Production Information Product/Items Quantity produced Selling price per unit (RM) Number of direct labour hours/unit Cost of direct labour (RM)/unit Direct Material cost/unit (RM) Production Cost Driver volume Machines set-up Machining Inspecting & Quality Control Number of orders Overhead estimation costs for each activities: Machines set-up Machining Inspecting & QC Ordering costs Kenanga Lily 48,00020,000 200 350 4 90 200 480 43,00036,500 220 700 2,400 1,800 (RM) 149,600 318,000 174,800 14,700

Question 1: Calculate the unit cost for each job using a traditional plant wide overhead rate based on direct labour hours

Question 2: Analyse the cost per unit for each job using Activity Based Costing (ABC)

Question 3: Calculate the profitability for the each product line using traditional and ABC method.

Question 4: Advice the company on the next course of action

Reference no: EM132536518

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Calculate the profitability for the each product line

Reference no: EM132536518

Reference no: EM132536518

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