Identify the incorrect answer: A proper overhead absorption rate could be: 1. 2. 3. 4. £6.67 per person-hour 185% of the wage bill £1000 per unit 800% on materials costs Identify the correct answer: To the nearest pound, the cost of the unit made in February, using an OAR based on person-hours, is: 1. £400 2. £422 3. £500 4. £822
Identify the incorrect answer: A proper overhead absorption rate could be: 1. 2. 3. 4. £6.67 per person-hour 185% of the wage bill £1000 per unit 800% on materials costs Identify the correct answer: To the nearest pound, the cost of the unit made in February, using an OAR based on person-hours, is: 1. £400 2. £422 3. £500 4. £822
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Only need to do second question thanks. For the second question, wouldn't the £150 class as labour hours? I don't understand why you multiply it the 30 by £6.67 when it already states the labour hours thanks
Transcribed Image Text:n
P3
OAR Example Questions
The following data applies to a cost centre in the month of January 2010
Total overhead = £10000, Labour Hours = 1500, Total direct wages =
£5400, Total material cost = £1200, Total machine hours = 200, Total units
produced = 10
In February 2010 Job #54 was completed using:
8 machine hours, materials costing £72, and 30 person-hours costing £150.
A single unit was produced and the selling price for the unit was £800.
Use this data to answer the two questions:
Identify the incorrect answer: A
proper overhead absorption rate
could be:
1.
2.
3.
4.
£6.67 per person-hour
185% of the wage bill
£1000 per unit
800% on materials costs
ly
Identify the correct answer: To the
nearest pound, the cost of the unit made
in February, using an OAR based on
person-hours, is:
1. £400
2. £422
3. £500
4. £822
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why do we mulitply 6.67 by 30 when labour hours have already been accounted for with the £150? Thanks
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