Question 3:

The production department of Xavier Pharmaceuticals L.L.C supplies you the following data for the year ending 31st December 2019.

Cost of Material used OMR. 27, 000

Direct wages paid OMR 22, 500

Labour hours worked 18, 000

Hours of machine operation 15,000

Overhead cost OMR. 18,000

You are required to ascertain overheads absorption rate by using the following methods:

a) Percentage of Direct material cost

b) Percentage of Direct wages cost

c) Direct labour hour rate

d) Machine hour rate