Ali Baba ltd uses absorption costing to allocate overheads to its three products X, Y and Z.

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Ali Baba ltd uses absorption costing to allocate overheads to its three products X, Y and Z. Overheads are absorbed into the products on machine hour basis. Total production overheads for the period are 7,20,000 pounds. Direct labour cost is 8 pound per hour. The table below gives the data relating to the individual products.

Products Labour hrs Machine hrs Material per unit(Pound) Volumes

X 1 2 10 1500

Y 1.5 3 20 4000

Z 2 3.5 24 6000

What is the total number of machine hours to produce all the units of three products?
What is the Overhead absorption rate?
What is the total cost for one unit of X?
What is the total cost of one unit of z?

Posted Date: Jun 23, 2024 08:12 AM

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Ali Baba ltd uses absorption costing to allocate overheads to its three products X, Y and Z.

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