Question
The following data relate to a manufacturing department for a period: Budgeted data for the coming year are as follows: Direct labour hours 60,000 hours
The following data relate to a manufacturing department for a period:
Budgeted data for the coming year are as follows:
Direct labour hours 60,000 hours
Direct labour cost $110,000
Direct material cost $125,000
Production overhead $70,400
Actual data for the period are as follows:
Direct labour hours 55,500 hours
Direct labour cost $125,000
Direct material cost $150,000
Production overhead $67,800
Required:
(7A) Calculate the production overhead absorption rate predetermined for the period based on :
- Percentage of direct material cost;
- Direct labour hours
(7B) Two pieces of furniture are to be manufactured for customers. Direct costs are as follows:
Job 400 Job 401
Direct material $15,400 $10,800
Direct labour 210 hours Dept. A @$16/ hour: 160 hours Dept. A @20/hour
120 hours Dept. B @$12/hour; 100 hours Dept. B @$18/hour
100 hours Dept. C @$14/hour; 140 hours Dept. C@$10/hour
Selling and administrative overheads for each job are 10% of factory cost.
Required:
(7C) Calculate the total costs of each job using all the two bases in question (7A) above.
(7D) If the firm quotes prices to customers that reflect a required profit of 25 per cent on selling price, calculate the quoted selling price for each job.
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