For the company in Question 37.3A, what would be the costs of the following jobs, given that
Question:
For the company in Question 37.3A, what would be the costs of the following jobs, given that the direct labour rate per hour is Dept P £6; Q £9; R £8; S £11; T £10?
Data from Question 37.3:
A manufacturer is producing five types of job, each in a separate production department P, Q, R, S and T. In addition, there are two service departments F and G. Costs have been allocated to the departments as follows:
The expenses of the service departments are to be allocated between other departments as follows:
Dept F to Depts P 15 per cent; Q 10 per cent; S 40 per cent; T 20 per cent; G 15 per cent.
Dept G to Depts P 20 per cent; Q 15 per cent; R 30 per cent; S 25 per cent; T 10 per cent.
In departments R and T the job costing is to use an overhead rate per direct labour hour, while in the other production departments a machine hour rate will be used. The number of direct labour hours and machine hours per department is expected to be:
You are required to calculate:
(a) The overhead rates for departments R and T.
(b) The overhead rates for departments P, Q and S.
Step by Step Answer:
Frank Woods Business Accounting Volume 2
ISBN: 9780273693109
10th Edition
Authors: Frank Wood, Alan Sangster