GST Limited is a multi-product company. The production and cost details of its two products P and Q are given as follows: Particulars Product P Q…

(i) Statement Showing “Total Cost - Traditional Method" Particulars of Costs P Q (₹) (₹) Direct Materials 72,000 50,000 Direct Labour [(800,600 hours) × 14.5] 11,600 8,700 Production Overheads [(800,600 hours) × ₹ 3.75] (WN1) 3,000 2,250 Total Cost 86,600 60,950 Cost per unit (9,000, 7,200) 9.62 8.47 WN1: Calculation of Production Overhead: (₹) Technical staff salary 45,000 Machine operation expenses 1,62,000 Machine maintenance expenses 27,000 Wages and salary of stores staff 36,000 Total Production Overhead 2,70,000 Total direct labour hours worked 72,000 hours Production Overhead rate per hour 3.75 (ii) Statement Showing “Total Cost - Activity Based Costing" Products P Q 9,000 7,200 (₹) (₹) Direct Materials 72,000 50,000 Direct Labour [(800,600 hours) × 14.5] 11,600 8,700 Requisition Related Costs @20 per requisition raised (180,144) (WN2) 3,600 2,880 Production Setup Costs @19 per production runs (144,108) (WN2) 2,736 2,052 Quality Inspection Costs @25 per quality test (27,18) (WN2) 675 450 Total Costs 90,611 64,082 Cost per unit (9,000, 7,200) 10.07 8.90 WN2: Statement Showing Distribution of Expenses Machine maintenance expenses Total Stores Production Setup Quality Control Technical staff salary of 45,000 (1:2:2) 9,000 - 18,000 18,000 Machine operation expenses of 1,62,000 (2:3) 64,800 - 97,200 - Machine maintenance expenses of 36,000 (2:3) (9,000) 14,400 - 21,600 - Wages and salary of stores staff - 36,000 - - Total 1,15,200 1,36,800 18,000 WN3: Cost for each activity cost driver: Activity (1) Total cost (₹) (2) Cost allocation base (3) Cost driver rate (4) = [(2) ÷ (3)] Stores Receiving 1,15,200 5,760 Requisitions Raised 20 per requisition raised Production Setup 1,36,800 7,200 Production Setup 19 per production setup Quality Control 18,000 720 Quality Test 25 per quality test