Cost Management Accounting-POAR

CMAC-POAR QUESTION 1 Gold Dust Ltd has produced the following budgeted data for its current financial year:- Sales 2 900 000 Direct materials 400 000 Direct labour 500 000 Production overhead 1 200 000 Production cost 2100 000 Gross Profit 800 000 Labour hours 48 000 Machine hours 60 000 Output in units 400 Job 227 has recently been completed and the job sheet shows the following details. Direct materials E1100 Direct labour E3000 Labour hours used 110 Machine hours used 140 Required:- a) Calculate the overhead absorption rates (POAR) using the following methods: % of direct materials . % of direct labour . Per unit produced Labour hour rate Machine hour rate b) Using the POARs calculated in part a) above, compute the production cost of Job 227 using each of the following methods: % of direct materials . Labour hour rate Machine hour rateQUESTION 2 A company makes two products, Product X and Y. Each product is processed through two cost centers, CC1 and CC2. The following budgeted data is available. CCI CC2 Allocated and apportioned overheads $126,000 $180,000 (All overheads are fixed costs.) Direct labour hours per unit Product X 1.5hrs 2.0hrs Product Y 1.2hrs 2.6hrs The budgeted production is 12,000 units of Product X and 10,000 units of Product Y. Fixed overheads are absorbed into costs on a direct labour hour basis. Required:- Calculate the budgeted total fixed overhead cost per unit for Product X and for Product Y