The production department of the XYZ Engineering Company makes 4000 items of its product X per...

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The production department of the XYZ Engineering Company makes 4000 items of its product X per month. This involves: 50 000 machine howrs, · 27 000 direct labour hours, I £100 000 direct labour costs The production department also produces products Y and Z and these together account for 70 000 machine hours • 40 000 direct labour hours £110 000 direct labour costs If the overhead costs that have to be absorbed are £85 000, what will be the cost that has to be absorbed in cach item df product X if the costs are apportioned on the basis of (a) number of machine hours, (b) direct labour hours, (c) direct labour costs? The production department of the XYZ Engineering Company makes 4000 items of its product X per month. This involves: 50 000 machine howrs, · 27 000 direct labour hours, I £100 000 direct labour costs The production department also produces products Y and Z and these together account for 70 000 machine hours • 40 000 direct labour hours £110 000 direct labour costs If the overhead costs that have to be absorbed are £85 000, what will be the cost that has to be absorbed in cach item df product X if the costs are apportioned on the basis of (a) number of machine hours, (b) direct labour hours, (c) direct labour costs?

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a Absorption rate Overheadnumber of machine hours overhead 85000 machine hours 50000 machin... View the full answer