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Question 4 Part A: West Works Ltd uses a predetermined overhead rate in applying overheads to product costs, using direct labour costs for cost centre
Question 4 Part A: West Works Ltd uses a predetermined overhead rate in applying overheads to product costs, using direct labour costs for cost centre X and machine hours for cost centre Y. The following details the estimated forecasts for 2014 Required: 1. a) Calculate the predetermined overhead rates for cost centres X and Y ? 2. b) Calculate the predetermined overhead rates if machine hours is used for X and direct labour hours for Y ? 3. c) Why do companies calculate predetermined overhead rates? Part B Why is it important for an entity to determine the costs incurred and how these costs behave? What purpose/purposes is this cost information used? Please answer All parts of the questions in the answer box below. Clearly indicate what question you are answering
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