the company works 1 00 000 direct labor hours p a total manufacturing overhead costs 649325

A company manufactures two products, X and Y. The product X is a low volume and its sales are only Rs.5,000 p.a. Product Y is high volume and labor intensive, its sales are 25,000 units pa. Product X takes 6 labor hours to make one unit but Y requires 8 hours per unit.

Details of costs for materials and labor for each product are as follows.

The company works 1,00,000 direct labor hours p.a. Total manufacturing overhead costs are Rs.17,50,000 p.a.

You are required to compute per unit cost of each product using,

I. Direct labor hour rate method for absorption of overhead costs and

II. Activity Based Costing technique for absorption of overhead costs