Question
Betta Ball Sports manufactures two products (Rubber Soccer Ball & Leather Soccer Ball) using the same...
Betta Ball Sports manufactures two products (Rubber Soccer Ball & Leather Soccer Ball) using the same machinery processes. You are provided with the following information relating to the existing production period.
|
Product |
Volume |
Material Cost per unit (R) |
Direct Labour cost per unit (R) |
Machine time per unit (Hours) |
|
Rubber Ball |
1000 |
5.00 |
5.50 |
0.35 |
|
Leather Ball |
700 |
20.00 |
2.00 |
1.00 |
Total production Overheads are as follows:
- Machine department: R50 000 (machine hours is the cost driver)
- Set‐up costs: R5 000
- Ordering Costs‐materials: R2 000
- Handling materials: R8 000
An analysis of production overhead activities for the period for the volume of products manufactured revealed the following:
|
Product |
# set-ups |
# material orders |
# times material were handled |
|
Rubber Ball |
1 |
1 |
2 |
|
Leather Ball |
2 |
1 |
3 |
Calculate the total budgeted product cost per unit for the Rubber Ball using Activity Based Costing (ABC). Round all answers to two decimal places
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