Egbert Ltd manufactures two products which it markets under the brand names 'Sovrin' and 'Ginny'. The following information is available for a six-month period.

Required 

(a) Calculate an appropriate overhead absorption rate for each department. 

(b) Calculate the overhead absorption for each unit of Sovrin and Ginny, in each of the departments, and in total. 

(c) Prepare a statement to show how the overhead of each department is absorbed by production. 

(d) Calculate the total cost of each unit of Sovrin and Ginny.

Transcribed Image Text:

No. of units Production cost centres: Direct materials per unit: Sovrin Ginny Direct labour per unit: Sovrin Ginny Machine hours per unit: Sovrin Ginny Direct labour hours per unit: Sovrin Ginny Sovrin 6000 Moulding $80 $65 $120 $96 23/ 2 4 33 Budgeted overhead expenditure $301 875 Budgeted machine hours 21 000 Budgeted direct labour hours 34.500 Ginny 3000 Machinery $10 $5 $40 $40 2 2 1 1/ $115 200 18.000 9 750 Paint shop $12 $15 $30 $15 1 12 1 1 $47 250 7 500 9.000