Intermediate: Overhead analysis sheet and calculation of overhead rates A company manulactures and sells two products, X andY, whose selling prices are £100 and £300 respectively, and each product passes through two manufacturing processes, A and B. In process A, product X take 2 hours per unit and product Y lakes 4 hours. In process B, product X takes one hour per unit and product Y takes 3 hours. Labour in process A is paid £4 per hour, and in process B £5 per hour.

The two products are made out of materials P, Q and R, and the quantities of each material used in making one unit of each product are:

Materia! prices are £1 per lb for P, £2.40 per dozen for a and £0.20 per square loot for R.
Salesmen are paid a commission of 5% of sales . The packing materials are £1 for X and £4 for Y. Costs of transporting the goods to the customer are £2 for X and £5 for Y. Other annual costs are:

A royalty of £1 per unH is payable on product X. The annual quantities sold are 15 000 units of X and 10 000 units of Y.
Other relevanl information is

You are required to:

(a) prepare a production overhead analysis and apportionment sheet. showing clearly the bases of apportionment used;

(b) calculate appropriate rates of overhead recovery for processes A and 8;

(c) calculate the full (absorption) cost of making and selling one unit of each product;

(d) calculate the unit profit or loss for each product.

Transcribed Image Text:

Material P Material Q 37 lb 10 Product X Product Y 93 lb 240 Material R 20 sq. feet 75 sq. feet