279.

GADGET COMPANY
Working notes:
(a) Under traditional absorption costing: Total overheads
Products A B C Total labour hours
Direct materials 2.4 3.6 4.8 OAR
Direct labour 1.48 2.22 2.96
Prime cost 3.88 5.82 7.76 Working notes:
Indirect cost(OH)(W) 2.83 4.245 5.66 (w1) Calculating cost per unit for each c
Full production cost per unit 6.71 10.065 13.42 Cost pool
Machine set up
Machine running
(b) Under activity based costing Procurement costs
Products A B C Delivery costs
Direct materials 2.4 3.6 4.8
Direct labour 1.48 2.22 2.96 (w2) Finding quantity of cost driver:
Prime cost 3.88 5.82 7.76 Products
Indirect cost (W2) 3.88 4.35 4.72 number of production run
Full production cost per unit 7.76 10.17 12.48 number of machine hours
number of purchase order
number of deliveries

Products
Machine set up
Machine running
Procurement costs
Delivery costs
Total overhead
Number of units
Overhead cost per unit
 195270
6900
28.3 per direct labour hour

ting cost per unit for each cost driver:

Amount($) Cost driver Quantity of cost driver Cost per unit for cost driver
26550 number of production run 36 737.5
66400 number of machine hours 32100 2.068536
48000 number of purchase order 94 510.6383
54320 number of deliveries 140 388

g quantity of cost driver:

A B C
roduction run 16 12 8
machine hours 7500 8400 16200
urchase order 24 28 42
48 30 62

A B C
11800 8850 5900
15514.0 17375.7 33510.3
12255.3 14297.9 21446.8
18624 11640 24056
58193 52164 84913
15000 12000 18000
3.88 4.35 4.72
Products A B C
Direct materials 2.4 3.6 4.8
Direct labour 1.48 2.22 2.96
Prime cost 3.88 5.82 7.76
Indirect cost(OH)(W) 0 0 0
Full production cost per unit 3.88 5.82 7.76

(b) Under activity based costing

Products A B C
Direct materials 2.4 3.6 4.8
Direct labour 1.48 2.22 2.96
Prime cost 3.88 5.82 7.76
Indirect cost (W2) 0.00 0.00 0.00
Full production cost per unit 3.88 5.82 7.76
279. GADGET COMPANY
Working notes:
(a) Under traditional absorption costing: Total overheads
Products A B C Total labour hours
Direct materials 2.4 3.6 4.8 OAR
Direct labour 1.48 2.22 2.96
Prime cost 3.88 5.82 7.76 Working notes:
Indirect cost(OH)(W) 2.83 4.245 5.66 (w1) Calculating cost per unit for each c
Full production cost per unit 6.71 10.065 13.42 Cost pool Amount($)
Machine se 26550
Machine ru 66400
(b) Under activity based costing Procuremen 48000
Products A B C Delivery co 54320
Direct materials 2.4 3.6 4.8
Direct labour 1.48 2.22 2.96 (w2) Finding quantity of cost driver:
Prime cost 3.88 5.82 7.76 Products
Indirect cost (W2) 3.88 4.35 4.72 number of production
Full production cost per unit 7.76 10.17 12.48 number of machine h
number of purchase o
number of deliveries

Products
Machine set up
Machine running
Procurement costs
Delivery costs
Total overhead
Number of units
Overhead cost per un
 195270
6900
28.3 per direct labour hour

ulating cost per unit for each cost driver:

Cost driverQuantity of cost driveCost per unit for cost driver
number of 36 737.5
number of 32100 2.068536
number of 94 510.6383
number of 140 388

ing quantity of cost driver:

A B C
16 12 8
7500 8400 16200
24 28 42
48 30 62

A B C
11800 8850 5900
15514.0 17375.7 33510.3
12255.3 14297.9 21446.8
18624 11640 24056
58193 52164 84913
15000 12000 18000
3.88 4.35 4.72