Suppose that Cooplan Ltd manufactures four products, W,X,Y and Z .Output and cos

Question

Suppose that Cooplan Ltd manufactures four products, W,X,Y and Z .Output and cost data for the period just ended are as follows.

Products    Output(unit)    Number of production      Materialcost      DirectLaour     Machine hours
                                        runs in theperiod             per unit ($)         hoursper unit   per unit

W             10                   2                                    20                      1                      1
X              10                   2                                    80                      3                      3
Y             100                  5                                    20                      1                      1
Z              100                 5                                     80                      3                      3


Direct labour cost per hour is $5

Overhead costs are as follows.
                                                   $
Short-run variablecosts             3,080
Set-Upcosts                           10,920
Production                                9,100
Materials handlingcosts             7,700

Required: Calculate product costs using the followingapproaches.
               (a) Absorption Costing
               (b) ABC

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