A business, that provides a service, expects to incur overheads totalling £20,000 next month. The total direct labour time worked is expected to be 1,600 hours and machines are expected to operate for a total of 1,000 hours.

During the next month, the business expects to do just two large jobs. Information concerning each job is as follows:

(a) A direct labour hour basis; and
(b) A machine hour basis?

What do you notice about the two sets of figures that you calculate?

Transcribed Image Text:

Job 2 800 Direct labour hours 300 Machine hours How much of the total overheads will be charged to each job if overheads are to be charged on: Job 1 800 700