Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012 Executive chair Chairman chair
Direct manufacturing costs Direct materials
€600,000
€25,000
Direct manufacturing labour,
€20 × 7,500; 500 150,000 10,000 Direct manufacturing costs
750,000 35,000
Indirect manufacturing costs Materials handling,
€0.25 × 100,000; 3,500 25,000 875
Cutting,
€2.50 × 100,000; 3,500 250,000 8,750
Assembly,
€25.00 × 7,500; 500 187,500 12,500 Indirect manufacturing costs 462,500 22,125 Total manufacturing costs
€1,212,500 €57,125 Unit costs Executive chair €1,212,500 ÷ 5,000 = €242.50 Chairman chair €57,125 ÷ 100 = €571.25
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