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Unformatted text preview: 7000 5000 12000 FOH rate 6.071429 7.5 Existing unit cost 85 16.67 45 28.33 less total unit cost 81.43 16.07 47.50 30.00 Profit per unit 3.57 0.60-2.5-1.67 The profitability has been shifted on pool basis, the pool A is showing profit while pool B is showing loss however overall profitability is once again the same. It seem better than discussed in 1 as the pool with high labor hours which is A has the overhead application rate less than the pool B which has fewer labor hours. However the most appropriate is the ABC costing if the cost detail and related drivers of fixed cost is available Material Labor Variable OH Unit var. cost Material Labor...
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- Spring '11