a. Calculate five different overhead absorption rates for cost centre 17 based on the following budgeted data.

b. A cost unit has been produced in Cost Centre 17 and the following details recorded:

Calculate the costs of this unit using each of the absorption bases calculated in a.

c. What basis of overhead absorption would you recommend if you are informed that Cost Centre 17 comprises a number of numerically controlled machine tools with semi-skilled operators and that over half of the cost centre’s overheads relate to machine depreciation? Give reasons.

Transcribed Image Text:

Labour hours for period 1,400 Total direct wages for period 3,600 Total direct materials for period 7,500 Total machine hours for period 2,850 Total units produced for period 535 Total overheads for period 12,900