Can someone show me the working out for the following question please?

AdamG09AdamG09 Posts: 2Registered
I have attached a PDF file of the question.

Best Answer

  • Pian32Pian32 Posts: 61
    Accepted Answer
    Overhead absorbtion rate:

    Total Overhead Costs/ Total of absorbtion factor e.g for Labour £245,000/17,500 = £14

    Your direct materials and direct labour are as stated in the question

    The overhead cost is the Absorbtion rate (from the 1st row) * amount of factor used e.g for labour £14*2 =£28

    Final row just add the costs

    Hope this helps.
    AdamG09

Answers

  • AdamG09AdamG09 Posts: 2Registered
    Thank you. I'm also struggling on this question. The direct labour cost is split into £11 per hour and i'm not sure how to complete the task.
  • Pian32Pian32 Posts: 61Registered
    If the direct labour cost is stated as £11 per hour (rather than simply £11) then you just need to multiply it by the number of hours for the product. You didn't post the question so for example if something took 0.5 hours the DLC would be 11*0.5=£5.5 but if it was 3 hours then 11*3= £33
Sign In or Register to comment.