The budget for the Mooarport Manufacturing Company for the coming year shows total production overheads as £23m. They plan to work 1.4 million hours.

a Calculate the production overhead rate per hour.

Total labour costs for the year are budgeted at £23m.

b Calculate the average wage rate per hour.

c Calculate the production overhead recovery rate as a percentage of direct labour cost.

The factory is divided into three departments; the budgets for each show:

d Calculate the production overhead rate per hour for each department.
e Calculate the average wage rate per hour for each department.
f Calculate the overhead recovery rate as a percentage of direct labour cost for each department.
The company makes a product called PQ that requires 13 hours of direct labour.

g Calculate the production overheads for product PQ using the production overhead rate per hour for the factory as a whole, as in

(a) above.

Transcribed Image Text:

Production overheads Hours worked Direct wages Department A 1m Department B Department C 2m 500,000 500,000 20m 400,000 5m 8m 10m