ABC Costing.

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

Answers

  • A_KhanA_Khan Posts: 4Registered
    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
  • CuddenCudden Posts: 7Registered
    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!
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