Reference no: EM133061115

Question - Apply the logic of an ABC cost hierarchy: ABC Ltd Produces Mathematical and Financial Calculators. Data related to the two products are presented below:

Particulars	Mathematical	Financial
Annual production in units	45,000	90,000
Direct material costs	$180,000	$360,000
Direct Manufacturing labour costs	$90,000	$180,000
Direct Manufacturing labour hours	2500	5000
Machine-hours	30,000	60,000
Number of production run	45	45
Inspection hours	1200	600

Both products pass through Department 1 and Department 2. The department combined manufacturing overhead costs are;

Costs Total

Machining $360,000

Setup 108,000

Inspection 117,000

Required -

1. Compute the manufacturing overhead cost per unit for each product.

2. Compute the manufacturing cost per unit for each product.