Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Kayamandi (Pty) Ltd ("Kayamandi") produces two special products, namely: IP3 and AV7

Kayamandi (Pty) Ltd ("Kayamandi") produces two special products, namely: IP3 and AV7

Accounting

Kayamandi (Pty) Ltd ("Kayamandi") produces two special products, namely: IP3 and AV7. The company uses activity-based costing. An equipment set-up is made for every 150 units of IPS and for every 120 units of AV7. If a traditional costing system was used, fixed manufacturing overheads would be based on budgeted production of 150 000 units per year, of which 90 000 units are IP8 and 60 000 units are Av7. The following budgeted information is available for the year ended 31 December 2022. Expected annual fixed manufacturing overheads and activities involved: Cost- and operational information: SRS product type TMS product type Total machine time 2 000 hours 3 000 hours Equipment set-ups ? ? Unidentified 2 ? Direct material (cost per R7 R9 unit) Direct labour (cost per unit) RS R6 Expected annual fixed manufacturing overheads and activities involved: Activity Machine usage Setting up of equipment Unidentified Total Cost drivers Machine hours Number of equipment set-ups ? R 200 000 38 500 75 000 313 500 (a) Calculate Kavamaodi (Pty) Ltd's activity rates for all the activities for the year ended December 2022. (b) Using your answer in (a) above, calculate the budgeted total annual manufacturing cost per product type. (c) Mention which one between a traditional costing system and an ABC system will most likely result in more accurate product costing in organisations facing intense global competition, with pressure on prices and quality, and briefly motivate your answer.

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE