Answer:
Using Direct Labour hours;
The cost per unit for Decoder P=$5.76
The cost per unit for Decoder Q=$5.76
Using Activity based costing;
The cost per unit for Decoder P=$7.48
The cost per unit for Decoder Q=$5.01
Explanation:
A)Total Overhead cost= $275,000
Total Labour Hours=22,000
P Total Overhead =6,600/22,000*$275,000=$82,500
Overhead cost per unit=$82,500+$31,680/19,800units=$5.76
Fixed cost=$105,600
19800/66000*$105,600=$31,680
Q Total overhead =15,400/22,000*$275,000=$192,500
Overhead cost per unit=$192,500+$73,920/46,200units=$5.76
Fixed cost=$105,600
46,200/66000*$105,600=$73,920
B)Using activity based costing;
Total Overhead cost= $275,000
Repair and Maintenence Cost = $105,600
Total Labour Hours=22,000
P Overhead =6,600/22,000*$275,000=$82,500
Overhead cost perunit=$82,500/19,800units=$4.16
P Activities overhead=(2000+190+1400)/5750*$105,600=$65,931.13
Activity cost per unit=$65,931.13/19,800units=$3.32
Total Overhead cost =$4.16+$3.32=$7.48
Q Total overhead =15,400/22,000*$275,000=$192,500
Overhead cost per unit=$192,500/46,200units=$4.16
Q Activities overhead=(1000+60+1,100)/5750*$105,600=$39,668.87
Activity cost per unit=$39,668.87/46,200units=$0.85
Total Overhead cost =$4.16+$0.85=$5.01
