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Businesses should ensure they price their goods and services reasonably to retain competitive advantage

Businesses should ensure they price their goods and services reasonably to retain competitive advantage. An accurate method of costing is important as it can assist a business to determine a fair price for their final product. With the above in mind, the CEO of GoGo Airlines has provided you with the following information: Total Overheads = £200,000 Total Machine Hours = 100,000 Product: Vegan Meal: Non-vegan Meal: Units of Production 300,000 450,000 Material Cost per meal £10 £12 Labour Cost per meal £8 £10 Machine Hours per meal 1/30 1/5  % Overheads Set-up Costs 20 Inspections 60 Delivery costs 20  Vegan Meal: Non-vegan Meal: Total: Set ups 100 500 600 Inspections 500 200 700 No. of Deliveries 400 800 1200 You are required to calculate the unit costs of the vegan and non-vegan meals using: Traditional costing using machine hours as the basis of allocation of costs and ABC system

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