Question
123 Ltd had the following budgeted figures for 2021. Cutting Department ... 123 Ltd had the following budgeted figures for 2021. Cutting Department Machining Department
123 Ltd had the following budgeted figures for 2021. Cutting Department ...
123 Ltd had the following budgeted figures for 2021.
Cutting Department | Machining Department | |
Direct labour cost | R320 000 | R122 000 |
Manufacturing Overheads | R504 000 | R525 000 |
Direct Labour hours | R56 000 | R 21000 |
Machine hours | R 4000 | R 75000 |
Overheads are applied to production as follows:
Cutting department - based on direct labour hours.
Machining department - based on machine hours
At the end of the period the cost records for job 999 were as follows
Cutting Department | Machining Department | |
Material costs | R 80 000 | R30 000 |
Direct Labour costs | R 60 000 | R25000 |
Direct labour hours | R 4 606 | 1200 |
Machine hours | R 350 | 6 250 |
The company sells all its products at cost plus 50%
Required
Calculate The following.
1. The overhead absorption rates for each department
2. The total cost of Job 999
3. The selling price of Job 999
4. The over- or Under-applied overheads for the cutting department for the year, if the actual labour hours for the year totalled 52000 and the actual overhead costs were recorded at R475 000.
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