Using ABC for strategic decisions L.O. P1, P3

Using ABC for strategic decisions L.O. P1, P3

 

Consider the following data for two products of Rowena Manufacturing.

 

 

 

Product A Product B
  Number of units produced   10,000 units   2,000 units
  Direct labor cost(@$24 per DLH)   0.20 DLH per unit   0.25 DLH per unit
  Direct materials cost   $ 2 per unit   $ 3 per unit

 

 

 

Activity Overhead costs
  Machine setup $ 121,000
  Materials handling 48,000
  Quality control 80,000


$ 249,000





 

 

 

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