Atlas Engineering Limited accepts a variety of jobs which require both manual and machine operations. The...
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Atlas Engineering Limited accepts a variety of jobs which require both manual and machine operations. The budgeted profit and loss account for the current period is as follows: (Rin lakh) Sales 75 Cost: Direct materials 10 Direct labour Prime cost 15 Production overheads 30 Production cost 45 Administrative, selling and distribution overheads 15 60 Profit 15 Other budgeted data: Labour-hours for the period Machine-hours for the period Number of jobs for the period An enquiry has been received recently from a customer and the production department has prepared 25,000 15,000 300 the following estimate of the prime cost required for the job. Direct material Direct labour 72,500 2,000 4,500 Prime cost Labour-hours required Machine-hours required 80 50 You are required to: (a) Calculate by different methods, six overhead absorption rates for absorption of production overhead and comment on the suitability of each. (b) Calculate the production overhead cost of the order based on each of the above rates. (c) Give your recommendation to the company. Atlas Engineering Limited accepts a variety of jobs which require both manual and machine operations. The budgeted profit and loss account for the current period is as follows: (Rin lakh) Sales 75 Cost: Direct materials 10 Direct labour Prime cost 15 Production overheads 30 Production cost 45 Administrative, selling and distribution overheads 15 60 Profit 15 Other budgeted data: Labour-hours for the period Machine-hours for the period Number of jobs for the period An enquiry has been received recently from a customer and the production department has prepared 25,000 15,000 300 the following estimate of the prime cost required for the job. Direct material Direct labour 72,500 2,000 4,500 Prime cost Labour-hours required Machine-hours required 80 50 You are required to: (a) Calculate by different methods, six overhead absorption rates for absorption of production overhead and comment on the suitability of each. (b) Calculate the production overhead cost of the order based on each of the above rates. (c) Give your recommendation to the company.
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C Overhead rates are based on labor and machine hours for ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
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