Burns Limited has three production departments (processing, assembly and finishing) and two service departments (administration and work study). The following information relates to April 2012:

£

Direct material

Processing ........................100000

Assembling .......................... 30000

Finishing ......................... 20000

Direct labour

Processing (£4 × 100000 hours) ................400000

Assembling (£5 × 30000 hours) ................150000

Finishing (£7 × 10000 hours) + (£5 × 10000 hours) .........120000

Administration ........................ 65000

Work study ........................ 33000

Other allocated costs

Processing ......................... 15000

Assembling ........................ 20000

Finishing ......................... 10000

Administration ........................ 35000

Work study ........................ 12000

Apportionment of costs:

Total machine hours: Processing 25000
All units produced in the factory pass through the three production departments before they are put into stock. Overhead is absorbed in the processing department on the basis of machine hours, on the basis of direct labour hours in the assembling department, and on the basis of the direct labour cost in the finishing department.
The following details relate to unit XP6:

XP6: Number of machine hours in the processing department = 6

Required:
Calculate the total cost of producing unitXP6.

Transcribed Image Text:

Process Assembling Finishing Work study Administration Work study 50 70 30 20 15 10 Direct materials Processing Assembling Finishing Direct labour Processing (2 hours) Assembling (1 hour) Finishing [(1 hour X £7) + (1 hour X £5)] Prime cost 15 8 25 47 12