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u have been asked to prepare a quotation for a special job which is to produce 2,000 units of the company's product, from the following
u have been asked to prepare a quotation for a special job which is to produce 2,000 units of the company's product, from the following information, assuming the company uses a 20% mark up on total cost: Department A Department B Number of Direct Employees 6 10 Area m^2 1,000 5,000 Direct Labour hours 9,000 16,000 Machine hours 5,000 40,000 Cost of Equipment 100,000 150,000 Ratio of Power usage 1 9 Direct Materials 10,000 80,000 Direct Labour 60,000 80,000 Department A calculates overhead absorption rates based upon labour hours. Department B calculates overhead absorption rates based upon machine hours. Overhead Analysis Statement Basis Total Department A Department B Indirect Materials Allocated 1,000 1,000 Indirect Labour Allocated 1,000 4,000 Rent and Rates Area m^2 15,000 Manager's Salary Number of direct Employees 50,000 Power Ratio of Power Usage 20,000 Equipment Depreciation Cost of Equipment 25,000 Building Insurance Area m^2 6,000 Department A Department B Direct Materials 50 0.15 Direct Labour ( hours) 50 60 Machine hours 10 200 Required- Identification of Overhead Rent and rates for department A = Managers salary for department B = Power for department A= Equipment depreciation department B= Building Insurance for department A = Required - identify
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