Reference no: EM132532027
Question - Nyang-Nyang Inc. accumulated the following cost information for its two products, A and B.
Product A Product B
Units produced 2,000 1,000
Total direct labor hours 5,000 20,000
Set-up cost per batch P1,000 P2,000
Batch size 100 50
Total set-up cost incurred P20,000 P40,000
Direct labor hour per unit 2 1
A traditional costing system would allocate setup costs on the basis of direct labor hours. An ABC system would trace costs by spreading the cost per batch over the units in a batch.
Required -
a. What is the setup cost per unit of Product A under Traditional Costing?
b. What is the setup cost per unit of Product A under Activity-Based Costing?
c. What is the setup cost per unit of Product B under Traditional Costing?
d. What is the setup cost per unit of Product B under Activity-Based Costing?