The following data relate to a manufacturing department for a period:

Job ZX was one of the jobs worked on during the period.
The actual data relating to this job were:

Required:

(a) Calculate the production-overhead absorption rate predetermined for the period based on:
(i) Percentage direct-material cost.
(ii) Machine hours.

(b) Calculate the production overhead cost to be charged to job ZX based on the rates calculated under (a)
above.

(c) Assuming that the machine hour rate of absorption is used, calculate the under- or over-absorption of production overheads for the period and state the appropriate treatment in the accounts.

Transcribed Image Text:

Budgeted Actual Data Data Rs. Rs. Direct material 1,00,000 1,40,000 Direct labour 2,00,000 2,50,000 Production overhead 2,00,000 2,30,000 Direct labour hours 50,000 62,500 Machine hours 40,000 50,000