The cost accountant of Nono Chemicals Ltd determined the overhead-recovery rate for the year 2009 (based on
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Question:
The cost accountant of Nono Chemicals Ltd determined the overhead-recovery rate for the year 2009 (based on direct-labour hours) with the following estimates:
| Rs. |
Indirect labour | 1,15,000 |
Inspection | 70,000 |
Factory supervision | 50,000 |
Depreciation & Maintenance | 1,25,000 |
| 3,60,000 |
Direct labour hours | 75,000 hours |
Hourly wage rate | Rs. 15 |
The actual results for the years are:
| |
Indirect labour | 99,000 |
Inspection | 73,000 |
Factory supervision | 51,000 |
Depreciation & Maintenance | 1,15,000 |
| 3,38,000 |
Direct labour hours | 67,600 |
Hourly wage rate | Rs. 16 |
Calculate the predetermined overhead recovery rate and find out the amount of under- or over-absorption, if any.
Related Book For
Statistics Data Analysis And Decision Modeling
ISBN: 9780132744287
5th Edition
Authors: James R. Evans
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