QUESTION 1

The following data relates to a manufacturing (production) department of JBY Ltd for the month of March 2023 :

	Budgeted data	Actual data
Direct material cost	K100000	K150000
Direct Labor cost	K250000	K 275000
Direct Labor hours	50000	55000
Machine hours	30000	40000
Production Overhead	K250000	K350000

Job A40 was one the jobs worked on during the month of March 2023. Direct material costing K7000 and direct labor ( 800 hours ) costing K4000 were incurred on this job.

REQUIRED

1. Calculate the predetermined overhead absorption rates for the period based on:

1. Percentage of direct material cost
2. Percentage of Direct labor cost
3. Percentage of Prime cost
4. Direct labor hours
5. Machine hours ( 6 marks )
6. Calculate the production overhead cost to be charged to Job A40 based on Percentage of Direct Material cost, percentage of Direct Labour cost, Percentage of Prime cost and Direct Labor hours ( 4 marks)
7. Calculate the under or over absorption of production overheads for the month of March 2023 on the basis of Overhead Absorption Rates ( OARs ) calculated in A ( 10 marks )

( 20 marks)