Carrell produces two types of jacket, Blouson and Bomber, in its factory that is divided into two departments, cutting and stitching. The firm wishes to calculate a fixed overhead cost per unit from the following budgeted data.
                                                                                Cutting dept                        Stitching dept
Allocated and apportioned overheads                  $120,000                        $72,000
Labour hours per unit
Blouson                                                               0.05 hours                      0.20 hours
Bomber                                                                0.10 hours                    0.25 hours
Budgeted production
Blouson                                                              6,000 units                  6,000 units
Bomber                                                                  6,000 units                 6,000 units

Question 1: If fixed overheads are absorbed by reference to labour hours, the overhead cost of a Bomber would be:
a $20.00
b $6.67
c $5.33
d $12.00

Answer rating: 100% (QA)

a 2000 Overhead rate Estimated overhead costs Total d... View the full answer