Question 5) Marks 20Brilliant Accents Company manufactures and sells three styles of kitchen taps: b 1 answer below »

Question 5) Marks 20Brilliant Accents Company manufactures and sells three styles of kitchen taps: brass, chrome,and white. Production takes 25, 25, and 10 machine hours to manufacture 1000-unit batchesof brass, chrome and white taps, respectively. The following additional data apply:Projected sales in unitsPER UNIT data:Selling priceDirect materialsDirect labourOverhead cost based on direct labour hours(traditional system)Hours per 1000-unit batch:Direct labour hoursMachine hoursSetup hoursInspection hoursBRASS30 000CHROME50 000WHITE40 000$40$20$30$8$15$4$3$8$9$12$3$940251.03010250.52030101.020Total overhead costs and activity levels for the year are estimated as follows:ActivityOverhead costsDirect labour hoursMachine hoursSetups$465 500Inspections$405 000$870 500Activity levels2900 hours2400 hours95 setup hours2700 inspection hoursRequired:a. Using the traditional system, determine the operating profit per unit for each style of tap.b. Determine the activity-cost-driver rate for setup costs and inspection costs.c. Using the ABC system, for each style of tap1. compute the estimated overhead costs per unit.2. compute the estimated operating profit per unit.d. Explain the differences between the profits obtained from the traditional system and theABC system. Which system provides a better estimate of profitability? Why?6|PageDue Date: Monday the 16th of May 2016 at 23.59pmACT202 Management AccountingAssignment oneSemester one -2016

 

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