• Direct material

X:100 per unit: Y: 120per unit

• Direct Labour (@ 80 per hour)
X:240 per unit: Y: 80 per unit
• Overhead:
Actual = 975,000
• Output:
X: 2500: Y:4000
• Absorption of overheads
At present the company is absorbing the MO on the basis of output ( MO/Output).
• Pricing Policy:
Total cost-plus profit of 20% on sales
• Managerial incentives
At end of the month (payable in November) both managers were given performance bonus as both products we
• Required: Cost, Price and profit
Abr: output basis
CPU Total Cost

X Y X Y Total
units 2500 4000 units 2500 4000 6500
DM 100 120 DM 250000 480000 730000
DL 240 80 DL 600000 320000 920000
OH 150 150 OH 375000 600000 975000
TC 490 350 TC 1225000 1400000 2625000
Profit 122.5 87.5 Profit 306250 350000 656250
SP 612.5 437.5 SP 1531250 1750000 3281250
ROS ROS

Abr: LhR LhR/unit 3 1

CPU 7500 4000 11500
Total Cost
X Y X Y Total
units 2500 4000 units 2500 4000 6500
DM 100 120 DM 250000 480000 730000
DL 240 80 DL 600000 320000 920000
OH OH 0 0 0
TC TC
Profit Profit
SP SP
ROS ROS
Overheads (from the X Y
Rent 200000 60000 140000
Salary 600000 180000
Depriciation
Lease Rent of an equipment used by Y
Overtime Premium in Y department
Electricity

X Y
Area Occupied 30 70
Employees 50 150
LhR
OH 975000
Output 6500

LhR 84.78261
OH 975000
Output 11500