A company has two production cost centres, M and L M absorbs overheads on the basis of machine Labsorbs overheads on the basis of labour hours. The following information is available for the next Cost centre Allocated and apportioned production overheads $400,000 Direct labour hours 50,000 Machine hours 80,000 M Job ABC will require four machine hours and three labour hours in each of the two production cost c How much production overhead will be absorbed by job ABC? O $31 O $44 $32 $64 $600,000 150,000 30,000
A company has two production cost centres, M and L M absorbs overheads on the basis of machine Labsorbs overheads on the basis of labour hours. The following information is available for the next Cost centre Allocated and apportioned production overheads $400,000 Direct labour hours 50,000 Machine hours 80,000 M Job ABC will require four machine hours and three labour hours in each of the two production cost c How much production overhead will be absorbed by job ABC? O $31 O $44 $32 $64 $600,000 150,000 30,000
Chapter1: Financial Statements And Business Decisions
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:A company has two production cost centres, M and L M absorbs overheads on the basis of machine hours and
Labsorbs overheads on the basis of labour hours. The following information is available for the next period
Cost centre
Allocated and apportioned production overheads $400,000
Direct labour hours
50,000
Machine hours
80,000
M
L
How much production overhead will be absorbed by job ABC?
O $31
O $44
$32
$64
$600,000
150,000
30,000
Job ABC will require four machine hours and three labour hours in each of the two production cost centres.
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