Q1. Lucille Linen runs a factory making tablecloths for the hospitality industry.

The total indirect costs for the year ended 30^th June are $420 000

Total direct labour hours for the current period are 10 500

Total machine hours for the current period are 12 000

1. The indirect cost rate for the business if the business allocates overheads using direct labour hours:

2. The indirect cost rate for the business is if the business allocates overheads using machine hours:

Q2. Lucille Linen runs a factory making tablecloths for the hospitality industry. Lucilles business allocates overheads using machine hours. The indirect cost rate is $35 per machine hour.

If one tablecloth requires the following:

- $30 direct materials

- 2 direct labour hours ($20 direct labour rate)

- 1.5 machine hours

3. What is the value of the allocated overheads of one tablecloth?

4. What is the full cost of one tablecloth?

Q3. Lucille Linen runs a factory making tablecloths for the hospitality industry. Lucilles business allocates overheads using labour hours. The indirect cost rate is $40 per direct labour hour.

If one tablecloth requires the following:

- $30 direct materials

- 2 direct labour hours ($20 direct labour rate)

- 1.5 machine hours

5. What is the value of the allocated overheads of one tablecloth?

6. What is the full cost of one tablecloth?

Q4. The steps involved in determining the full cost of a cost object are listed below (in no particular order).

A	determine the indirect cost rate for each cost pool
B	identify the cost driver to be used
C	identify the indirect cost to be allocated to the cost object
D	total all indirect costs
E	determine the full cost of the cost object

7. The correct order for carrying out these steps is:

Q5. Lucille Linen runs a factory making tablecloths for the hospitality industry.

The list below provides costs at the factory:

- Factory electricity expense

- Factory supervisors salary expense

- Repairs and maintenance of factory machines

8. For costing calculations how would you classify them?

Q6. Lucille Linen runs a factory making tablecloths for the hospitality industry.

The list below provides costs at the factory:

- Purchase of tablecloth material

- Purchase of tablecloth trims

- Casual wages expense to the person making the tablecloth

9. For costing calculations how would you classify them?

Q7. Lucille Linen runs a factory making tablecloths for the hospitality industry.

If the full cost of a tablecloth is $125 and the cost-based pricing was used with a 60% markup. 10. What would the selling price be?