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Kofi Brokeman uses a predetermined overhead rate to allocate overhead. Overhead is allocated on the basis of direct labour hours in department 1 and on the basis of machine hours in department 2. At the beginning of the year, the following estimates are provided: Department One Department Two Direct Labour Hours 100,000 20,000 Machine Hours 10,000 30,000 Direct Labour Cost C750,000 C160,000 Overhead Cost C250,000 C162,000 Actual Costs reported for all jobs during the year are as follows: Department One Department Two Direct Labour Hours 98,000 21,000 Machine Hour 11,000 32,000 Direct Labour Cost C748,000 C168,000 Overhead Cost C247,500 C175,000 The accounting records of the company show the following data for Job 60 which was done for Naya Ltd. Department One Department Two Direct Labour Hours 125 50 Machine Hours 10 205 Direct Material Cost C1,580 c2,650 Direct Labour Cost C937 C400 Required: a. Compute the predetermined overhead absorption rate (OAR) for each department. b. Compute the total cost for Job 60. c. If there are 50 units in Job 60, what is the unit cost?

Kofi Brokeman uses a predetermined overhead rate to allocate overhead. Overhead is allocated on the basis of direct labour hours in department 1 and on the basis of machine hours in department 2. At the beginning of the year, the following estimates are provided: Department One Department Two Direct Labour Hours 100,000 20,000 Machine Hours 10,000 30,000 Direct Labour Cost C750,000 C160,000 Overhead Cost C250,000 C162,000 Actual Costs reported for all jobs during the year are as follows: Department One Department Two Direct Labour Hours 98,000 21,000 Machine Hour 11,000 32,000 Direct Labour Cost C748,000 C168,000 Overhead Cost C247,500 C175,000 The accounting records of the company show the following data for Job 60 which was done for Naya Ltd. Department One Department Two Direct Labour Hours 125 50 Machine Hours 10 205 Direct Material Cost C1,580 c2,650 Direct Labour Cost C937 C400 Required: a. Compute the predetermined overhead absorption rate (OAR) for each department. b. Compute the total cost for Job 60. c. If there are 50 units in Job 60, what is the unit cost?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kofi Brokeman uses a predetermined overhead rate to allocate overhead. Overhead is allocated on the basis of direct labour hours in department 1 and on the basis of machine hours in department 2. At the beginning of the year, the following estimates are provided: Department One Department Two Direct Labour Hours 100,000 20,000 Machine Hours 10,000 30,000 Direct Labour Cost C750,000 C160,000 Overhead Cost C250,000 C162,000 Actual Costs reported for all jobs during the year are as follows: Department One Department Two Direct Labour Hours 98,000 21,000 Machine Hour 11,000 32,000 Direct Labour Cost C748,000 C168,000 Overhead Cost C247,500 C175,000 The accounting records of the company show the following data for Job 60 which was done for Naya Ltd. Department One Department Two Direct Labour Hours 125 50 Machine Hours 10 205 Direct Material Cost C1,580 c2,650 Direct Labour Cost C937 C400 Requlred: a. Compute the predetermined overhead absorption rate (OAR) for each department. b. Compute the total cost for Job 60. c. If there are 50 units in Job 60, what is the unit cost? d. If the firm anticipates a profit margin of 25%, determine the selling price for a unit of Job 60
Transcribed Image Text:Kofi Brokeman uses a predetermined overhead rate to allocate overhead. Overhead is allocated on the basis of direct labour hours in department 1 and on the basis of machine hours in department 2. At the beginning of the year, the following estimates are provided: Department One Department Two Direct Labour Hours 100,000 20,000 Machine Hours 10,000 30,000 Direct Labour Cost C750,000 C160,000 Overhead Cost C250,000 C162,000 Actual Costs reported for all jobs during the year are as follows: Department One Department Two Direct Labour Hours 98,000 21,000 Machine Hour 11,000 32,000 Direct Labour Cost C748,000 C168,000 Overhead Cost C247,500 C175,000 The accounting records of the company show the following data for Job 60 which was done for Naya Ltd. Department One Department Two Direct Labour Hours 125 50 Machine Hours 10 205 Direct Material Cost C1,580 c2,650 Direct Labour Cost C937 C400 Requlred: a. Compute the predetermined overhead absorption rate (OAR) for each department. b. Compute the total cost for Job 60. c. If there are 50 units in Job 60, what is the unit cost? d. If the firm anticipates a profit margin of 25%, determine the selling price for a unit of Job 60
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