Question
7.22The following annual data relate to Facsimile Printing Pty Ltd: Budgeted machine hours 15 000 Budgeted direct labour hours 30 000 Budgeted direct labour cost
7.22The following annual data relate to Facsimile Printing Pty Ltd:
Budgeted machine hours
15 000
Budgeted direct labour hours
30 000
Budgeted direct labour cost
$420 000
Budgeted manufacturing overhead
$546 000
During the month of June the firm worked on three productsbusiness cards, wedding invitations and promotion flyersusing the following inputs:
Business cards
Wedding
Invitations
Promotion flyers
Actual machine hours
600
300
200
Actual direct labour hours
800
600
400
Actual manufacturing overhead costs for June were $51 000 and the actual direct labour rate was $22.50 per hour.
Required:
Assume that the firm uses machine hours as its overhead cost driver:
1.Calculate the firm's predetermined plantwide overhead rate.
2.Estimate the overhead costs of each of the three products.
Compare the actual overhead cost to the amount of overhead applied to the three products in June
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