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calculate the overhead recovery for purchasing costs if those costs were recovered o 598421

Elandem PLC produces 20,000 units of Product L and 20,000 units of Product M. Under activity-based costing, €120,000 of costs are purchasing related. If 240 purchase orders are produced each period, and the number of orders used by each product is:

Product L

Product M

No. of orders

80

160

  • Calculate the per-unit activity-based cost of purchasing for Products L and M.
  • Calculate the overhead recovery for purchasing costs if those costs were recovered over the number of units of the product produced.

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