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  • Problem 5 20

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    Sachin Garg
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    Total material handling cost = 50000$ Allocation of overhead as per direct labor hr. (for lenses) = 50000 200 = 1000 $ 25(200) +25(200) 5) Activity based costing (material handling costs) material handled 5 (in lenses) material handled 15 (in mirrors) = (50000 5 / 5+15) = 12500$ 12500 is for 25 units So per unit cost is 500$.

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    Total material handling cost = 50000$ Allocation of overhead as per direct labor hr. (for lenses) = 50000 200 = 1000 $ 25(200) +25(200) 5) Activity based costing (material handling costs) material handled 5 (in lenses) material handled 15 (in mirrors) = (50000 5 / 5+15) = 12500$ 12500 is for 25 units So per unit cost is 500$.

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    3 views2 pages

    Problem 5 20

    Uploaded by

    Sachin Garg
    Total material handling cost = 50000$ Allocation of overhead as per direct labor hr. (for lenses) = 50000 200 = 1000 $ 25(200) +25(200) 5) Activity based costing (material handling costs) material handled 5 (in lenses) material handled 15 (in mirrors) = (50000 5 / 5+15) = 12500$ 12500 is for 25 units So per unit cost is 500$.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    Exercise 5-20

    Traditional method Required:


    1) Units produced = 25units (lenses) Direct labor hour = 200hrs (lenses) Units produced = 25 units (mirrors) Direct labor hour = 200hrs (mirrors) Total material handling cost = 50000$ Allocation of overhead as per direct labor hr. (for lenses) = 50000 *200 = 1000 $ 25(200) +25(200) 2) Units produced = 25units (lenses) Direct labor hour = 200hrs (lenses) Units produced = 25 units (mirrors) Direct labor hour = 200hrs (mirrors) Total material handling cost = 50000$ Allocation of overhead as per direct labor hr. (for Mirrors) = 50000 *200 = 1000 $ 25(200) +25(200)

    3) Activity based costing (material handling costs)

    Material handled 5 (in lenses) Material handled 15 (in mirrors) = (50000 *5/5+15) = 12500$ 12500 is for 25 units So per unit cost is 500$
    4) Activity based costing (material handling costs)

    Material handled 5 (in lenses) Material handled 15 (in mirrors) = (50000 *15/5+15) = 37500$ 37500 is for 25 units So per unit cost is 1500$

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