This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version?of the exam they are taking.?
The ABC Company manufactures two products, Product Alpha and Product Beta. Both are?produced in a very labour-intensive environment and use similar processes. Alpha and Beta?differ by volume. Beta is a high-volume product, while Alpha is a low-volume product.?Details of product inputs, outputs and the costs of activities are as follows:?
Fixed overhead costs amount to a total of $420,000 and have been analysed as follows:???
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?$?
Volume-related? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 100,000?
Purchasing related? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?145,000?
Set-up related? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 175,000?
Using a traditional method of overhead absorption based on labour hours, what is the?overhead cost per unit for each unit of product Alpha?