16.9 Burns Limited has three production departments (processing, assembly and finishing)

and two service departments (administration and work study). The following information relates to April 2004:

Total machine hours: Processing 25 000 All units produced in the factory pass through the three production departments before they are put into stock. Overhead is absorbed in the processing department on the basis of machine hours, on the basis of direct labour hours in the assembling department, and on the basis of the direct labour cost in the finishing department.

The following details relate to unit XP6:

XP6: Number of machine hours in the processing department = 6 Required:
Calculate the total cost of producing unit XP6.

Transcribed Image Text:

Direct material Processing Assembling Finishing 100000 30000 20000 Direct labour Processing (4 x 100000 hours) 400000 Assembling (5 x 30000 hours) 150000 Finishing (7 x 10000 hours) + (5 x 10000 hours) 120000 Administration 65000 Work study 33000 Other allocated costs Processing Assembling Finishing Administration Work study Apportionment of costs: 15000 20000 10000 35000 12000 Process Assembling Finishing Work study % % % % Administration 50 30 15 5 Work study 70 20 10