Question
Bucks has two production departments and two service departments. Production overheads are expected to be as follows: Rent and rates 25,000 Lighting and heating 15,000
Bucks has two production departments and two service departments. Production overheads are expected to be as follows:
Rent and rates
25,000
Lighting and heating
15,000
Depreciation of machinery
20,000
Insurance of machinery
9,500
Supervisors salary
25,000
Buildings insurance
12,500
The following information is also available:
Production departments
Service departments
Machining
Finishing
Stores
Maintenance
Floor area (square metres)
350
250
200
100
Number of production staff
15
10
-
-
Value of machinery (000)
120
115
17
18
Each of the production staff is expected to work 38 hours per week for 48 weeks.
Apportionment of service centres:
Machining
Finishing
Stores
60%
40%
Maintenance
70%
30%
Additional information: the production manager has provided other costing information: direct material cost is 9.56, and 1 hour of direct labour hour is required per unit in both departments and workers are paid at 12.00 per hour. The company absorbed overhead based on labour hour.
calculate the unit cost of production under the conventional costing method using.
Bucks has two production departments and two service departments. Production overheads are expected to be as follows:
The following information is also available:
Each of the production staff is expected to work 38 hours per week for 48 weeks. Apportionment of service centres:
Additional information: the production manager has provided other costing information: direct material cost is 9.56, and 1 hour of direct labour hour is required per unit in both departments and workers are paid at 12.00 per hour. The company absorbed overhead based on labour hour.
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