Question 3 New World Manufacturers makes jars to order and has the following budgeted overheads for...
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Question 3 New World Manufacturers makes jars to order and has the following budgeted overheads for the year, based on normal activity levels. Overhead Absorption Base Department A B CA D Budgeted Overheads ($) 30 000 5 000 labour hours 42 000 3 500 machine hours 45 000 3 000 labour hours 32.000 4 000 labour hours Non-production overheads are 25% of production cost. An order for 300 jars, made as batch 1000, incurred the following costs: Materials Labour $6 200 150 hours in Department A at $ 6.50 per hour 500 hours in Department B at $7.00 per hour 140 hours in Department C at $8.00 per hour 160 hours in Department C at $6.00 per hour Special Design cost for a batch is $800. 850 machine hours were worked in Department B. Required: A. Calculate the budgeted overhead absorption rate for each department. (4 marks) B. Calculate the total cost of the batch. (14 marks) C. Calculate the cost per unit of batch 1000. (2 marks) Question 3 New World Manufacturers makes jars to order and has the following budgeted overheads for the year, based on normal activity levels. Overhead Absorption Base Department A B CA D Budgeted Overheads ($) 30 000 5 000 labour hours 42 000 3 500 machine hours 45 000 3 000 labour hours 32.000 4 000 labour hours Non-production overheads are 25% of production cost. An order for 300 jars, made as batch 1000, incurred the following costs: Materials Labour $6 200 150 hours in Department A at $ 6.50 per hour 500 hours in Department B at $7.00 per hour 140 hours in Department C at $8.00 per hour 160 hours in Department C at $6.00 per hour Special Design cost for a batch is $800. 850 machine hours were worked in Department B. Required: A. Calculate the budgeted overhead absorption rate for each department. (4 marks) B. Calculate the total cost of the batch. (14 marks) C. Calculate the cost per unit of batch 1000. (2 marks)
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