Spotless Cleaners employs 25 professional cleaners. Total budgeted cost is $900,000 of which $525,000 is direct costs. Budgeted indirect costs are $375,000 and actual indirect costs were $396,900. Budgeted professional labour-hours are 500,000 and actual hours were 504,000.

What is the budgeted direct cost allocation rate? (3 marks)

What is the budgeted indirect cost allocation rate using direct labour hours as the allocation basis (3 marks)

Would there be an over or under absorption of indirect cost and how much would it be? (4 marks)

Plush Comfort manufactures coverings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Assembly and Finishing. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

Data for Assembly for February 2015 are:

Work in process, beginning inventory, 40% converted 200 units

Units started during February 600 units

Work in process, ending inventory 100 units

Costs for Assembly for February 2015 are:

Work in process, beginning inventory:

Direct materials $100,000

Conversion costs $100,000

Direct materials costs added during February $1,000,000 Conversion costs added during February $1,250,000

What is the unit cost per equivalent unit in Assembly? (4 marks)

How many units were completed and transferred out of Assembly during February? (3 marks)

What is the major difference between the weighted average method and the FIFO method in process costing? (3 marks)