Question
The following data relate to Noosa Supply Company for the year ended 31 December 2019: Budgeted sales revenue RM 205,000 Actual manufacturing overhead RM 340,000
The following data relate to Noosa Supply Company for the year ended 31 December 2019:
Budgeted sales revenue RM 205,000
Actual manufacturing overhead RM 340,000
Budgeted machine hours 10,000
Budgeted direct labour hours 20,000
Budgeted direct labour rate RM 14
Budgeted manufacturing overhead RM364,000
Actual machine hours 11,000
Actual direct labour hours 18,000
Actual direct labour rate RM 15
Required:
1.Calculate the firm's predetermined and actual overhead rates for the year 2019 using each of the following cost drivers:
a.Machine hours
b.Direct labour cost
2.Would you recommend using an actual overhead rate or predetermined overhead rate for Noosa Supply Company? Explain your answer.
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