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Example (based on Major, 2007): Oculus Ltd. manufactures products X and Y. Details of the two products and relevant information for one period are given
Example (based on Major, 2007): Oculus Ltd. manufactures products X and Y. Details of the two products and relevant information for one period are given in the following table X is produced in runs of 2,000 units and Y in runs of 20 units. The total manufacturing overhead for the period is 270,900 Oculus has been using a direct labour rate to allocate manufacturing overhead. Production and sales Selling price (per unit) Direct material cost (per unit) Direct labour cost (per unit) Product X 30,000 units 140 E20 E40 Product Y 1,000 units E200 E40 E60 Product X ProductY Sale revenues Direct material costs Direct labour costs Manufacturing overhead costs Profit Profit margin Cost Direct material costs Direct labour costs Manufacturing overhead costs Total manufacturing costs Product cost per unit ProductX ProductY
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