Reference no: EM131030067

The question is shown below:

Question: Fixie Berhad manufacture special bicycle for disable person. The company was adopting ABC system in their operation. Below is the information regarding activity cost pools, cost drivers and pools rates for product costing system.

Activity cost Pool	Overhead Cost (RM)	Budgeted Level for cost Drivers
Purchasing and material handling	150,000	RM 300,000
Product design	70,000	2,500 hrs
Machine setup costs	60,000	4,000 runs
Machine maintenance	25,000	30,000 hrs

This company manufactures two different products which required the following.

	10,000 units of AA	5000 units of BB
Raw material cost	RM 50,000	RM 250,000
Hours in design department	1,000	1500
Product runs	2,000	2000
Machine hours	10,000	20000
Direct labour hours	10,000	5000

Required

a. Complete activity rates for each activity pool.

b. Compute total overheads that should be assigned for each of the products.

c. Compute unit cost PER products.

d. Assume this company use traditional costing based on direct labor hours. The direct labour hour budget

• Compute POHR.
• Compute total overhead cost for each product.
• Compute unit cost for each product.