What abc allocation rate for supervision of direct labor

Reference no: EM132473055

Question i: Give a numerical example of non routine decision, Determine the relevant costs for this non routine decision and discuss the analysis (quantitative and qualitative) required to make the decision?

Question ii: Which types of companies would most likely use a process costing system? Provide examples of two Saudi Compagnies.

Question ii. a. Explain the methods with which the cost per unit will be calculated for this type of companies.Explain how the different items of inventory will be evaluated?

Question iii: KLM Compagny has two departments, Assembly and Testing. You are given the following information about the costs of 5 activities that occur at the manufacturing plant monthly:

Activity                                    Total Costs                              Total number of units of Cost Driver
Material handling                          SAR200,000                                      400,000 parts
Supervision of direct labor                126,000                                         90 employees
Janitorial and cleaning                      200,000                                            4,000 hours
Machining                                        300,000                                          7,000 machine hours
Total costs                                      SAR8                                               26,000

The above activities are used by the two departments as follows:

                                                                 Assembly                         Testing
Material handling                                          200,000 parts             200,000 parts
Supervision of direct labor                              40employees             50 employees
Time spent cleaning                                      2,000 hours               2,000 hours
Number of machine hours                               5,000 machine hours    2,000 machine hours

Question iii a. How much of the material handling cost will be allocated to Assembly?

Question iii b. What is the ABC allocation rate for supervision of direct labor?

Reference no: EM132473055

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