Reference no: EM132561358

Adom Manufacturers Limited has recently introduced an Activity Based Costing System and has provided the following details for the month of January:

Cost Pool Overhead Cost

GH¢

Parts 10,000

Maintenance 18,000

Stores 10,000

Administration 2,000

You have ascertained the following activity information:

Number of employees 40

Total number of parts 500

Number of materials requisitions 20

Maintenance hours 600

During the month, 500 units of Product Y were produced. This production run required 100 parts and 150 maintenance hours; 5 material requisitions were made and 10 employees worked on the units.

Required:

Question i. Using maintenance hour for the absorption of overheads, calculate the overhead cost per unit of product Y

Question ii. Using Activity Based Costing, calculate the total amount of overhead absorbed by each unit of Product Y.