ABC Costing.

Rose20

Hey, can anybody explain how to work out part (c)
The answers are exe - total cost per unit ABC 57.60. Wye is 163
Absorption costing for Exe is 66 and Wye 100

A_Khan

Have you checked part a? I dont think the ABC method is correct.

I get the absorption costing answers.
Do fixed costs e.g. Exe 300,000 worked out in part b ÷ total units 15,000 given in question = £20 per unit fixed costs. Then add on the variable elements = 6+40+20=66
Same with Wye. Fixed absobed £90,000 ÷ 2000units = £45 fixed costs +variable elements (10+45) = £100 total cost

Cudden

ABC goes something like this:
First total the ABC Fixed Costs for Exe (£30000 + £144000) £174000 and Wye (£120000 + £96000) £216000.
ABC Exe
£6 + £40 = £46.00
£174000/15000 = £11.60
Total = £57.60
ABC Wye
£10 + £45 = £55.00
£216000/2000 = £108.000
Total = £163.00
I hope this is of some assistance, all the best as you prepare for the exam!