Shown below is an extract from next year’s plans for a business manufacturing three products, A, B and C, in three product cost centres.
The skilled operatives employed in the cutting department are paid £16 an hour and the
unskilled operatives are paid £10 an hour. All the operatives in the machining and pressing
departments are paid £12 an hour.
The business operates a full absorption costing system.
Required:
Derive the total planned cost of:
(a) One completed unit of product A.
(b) One incomplete unit of product B, which has been processed by the cutting and machining
departments but which has not yet been passed into the pressing department.
Consider this statement: