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Osborne Ltd manufactures a wide range of leather suitcases. The following costs are expected to be incurred by the company during May: Indirect labour cost
Osborne Ltd manufactures a wide range of leather suitcases. The following costs are expected to be incurred by the company during May: Indirect labour cost $28,000 Direct labour time 10,000 hours Depreciation on equipment $20,000 Rent and Rates $13,000 Direct labour costs $98,000 Heating, lighting and power $ 4,000 Machine time 8,000 hours Indirect materials $ 5,000 Consumables $ 2,000 Direct materials used $50,000 Production estimate 1,000 suitcases The management accountant at Osborne Ltd, wants to revise his estimates and use machine hours as the allocation base to determine the overhead recovery rate. The revised overhead recovery rate (rounded) per machine hour will be
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