standar absorption cost per unit

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nabutt
nabutt Registered Posts: 86 Regular contributor ⭐
how to find st absorbtion cost /unit if

direct material = 8 kg @1.50/kg
labour = 3 hrs @2/hr

Fixed prduction overhead is absorbed @200% of direct wages


Thnkx in advance

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  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
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    Standard absorption cost of one unit

    D Material
    8.00kg x £1.50/kg= £12.00
    D Labour
    .--3.00 hrs x £2.00/hr = £6.00 mean hourly rate!
    Fixed overhead -3.00 hrs x £4.00/hr = £12.00 see how the OAR is 200% x the direct labour rate
    Total standard cost per unit
    £30.00
    Sandy
    sandy@sandyhood.com
    www.sandyhood.com
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