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Calculate cost per unit of cost driver for material planning

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Question - ABC co. has identified the following two overhead cost items and 3 activities. Two overheads are Indirect labor of Rs. 20,000 and IT support of Rs. 50,000. Three activities are production support, materials planning and machine setup. Three activities take 40%, 40% and 20% of indirect labour and 50%,20% and 30% of IT support respectively. If the cost driver for Material planning was no. of purchase order and total number of purchase orders were 6,000, calculate cost per unit of cost driver for material planning.

a. Rs. 3.33 per purchase order

b. Rs. 8.33 per purchase order

c. Rs. 11.66 per purchase order

d. Rs. 3 per purchase order

Reference no: EM132714943

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