Page 294 - P1 Integrated Workbook STUDENT 2018
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Subject P1: Management Accounting
1.3 The answer is $59.
Set-up cost per production run = ($50,400/28) = $1,800.
Quality control cost per inspection = ($144,000/16) = $9,000.
General overhead cost per machine hour = $50,000/(10,000 + 40,000) = $1
Overhead costs of Product A
$
Set-up costs (20 × $1,800) 36,000
Inspection costs (8 × $9,000) 72,000
General overheads (10,000 × $1) 10,000
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118,000
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Overhead cost per unit = $118,000/2,000 units = $59.
1.4 The answer is $2,400.
The most appropriate cost driver for reviews would be the number of checks per
service.
Total number of checks = (800 × 1) + (400 × 4) + (60 × 8) = 2,880
Cost per check = $864,000/2,880 = $300
The review cost for property management services = $300 × 8 = $2,400
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