Question
Ali baba ltd uses absorption costing to allocate overheads to its three products X,Y and Z. Overheads are absorbed into products on machine hour basis.
Ali baba ltd uses absorption costing to allocate overheads to its three products X,Y and Z. Overheads are absorbed into products on machine hour basis. Total production overheads for the period are 7,20,000 pound. direct labour cost is 8 pound per hour. The table below gives the data related to the individual products.
Products: Labour Hours Machine hours Material per unit 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?
Please share the answers along with the calculations also explain how to calculate the above sum
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