Furniture company Ltd has presented the following budgeted overhead costs for the month of April, 2024 together with the details as shown below: Cost pool particulars Amount (Ugx) Ordering costs 25,000,000 Inspection costs 40,000,000 Set up costs 6,000,000 Material handling costs 32,000,000 Details of the cost drivers include the following: Total number of orders in the month 500 Total number of machine set ups 250 Total number of material handling 800 Total number of inspections 320 The company has budgeted to produce four furniture products; one of them is Deluxe chair which requires the following: Ugx Material cost 10,000,000 Labour cost 12,000,000 Direct expenses 18,000,000 Number of 0rders 10 Number of Inspections 5 Number of machine Set up 40 Number of Material handling 30 Required: Using Activity Based Costing method, compute the total cost of producing Deluxe chair
Furniture company Ltd has presented the following budgeted overhead costs for the month of April, 2024 together with the details as shown below:
|
Cost pool particulars |
Amount (Ugx) |
|
Ordering costs |
25,000,000 |
|
Inspection costs |
40,000,000 |
|
Set up costs |
6,000,000 |
|
Material handling costs |
32,000,000 |
|
Details of the cost drivers include the following: |
|
|
Total number of orders in the month |
500 |
|
Total number of machine set ups |
250 |
|
Total number of material handling |
800 |
|
Total number of inspections |
320 |
The company has budgeted to produce four furniture products; one of them is Deluxe chair which requires the following:
|
|
Ugx |
|
Material cost |
10,000,000 |
|
Labour cost |
12,000,000 |
|
Direct expenses |
18,000,000 |
|
Number of 0rders |
10 |
|
Number of Inspections |
5 |
|
Number of machine Set up |
40 |
|
Number of Material handling |
30 |
Required:
Using Activity Based Costing method, compute the total cost of producing Deluxe chair
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