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Hi to everyone.
00:01
So first one is traditional costing approach.
00:04
So first we calculate the overhead allocation rate.
00:12
So it is total manufacturing overhead.
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That is 290000 by total direct labour hour 3600.
00:22
So total of 80 .56 per direct labour hour.
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Now calculate product cost of ab.
00:37
Product cost calculation.
00:39
So for a, it is direct material cost.
00:44
So 9000 plus direct labour hour 3600 into direct labour rate 9.
00:52
Plus direct labour hour 3600 into overhead allocation rate 80 .56.
01:00
So it is equal to 399816.
01:06
Similarly for product b, it is 50000 plus 2000 into 9 plus 2000 into 80 .56.
01:21
So on solving this 227112.
01:24
Now product c, 40000 plus 800 into 9 plus 800 into 80 .56.
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So total of 115656.
01:43
Now b is activity based costing...