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Department S. T
(000). (000)
Allocated AFO. 60. 100
Totat d.material used 120 100
Total labor hours 5. 10Material
Dept S 3kg@4per kg. 12
Dept T. 2kg@4 per kg. 8Labour
Dept S. 1/2 hour @10 per hour 5
Dept T 1 1/2 hours @10. 15
Variable OA 1 hour @5 per 5
Total. 45If fixed overhead are absorbed on the basis department material cost , the fixed overhead cost per uintaite is:
A. 5.5
B 12
C 14
D 21
Kit question 99I have no idea which kit you are talking about.
Also you have not said where your problem is!!Overheads are absorbed on the basis of material cost.
So…for department S, total overheads are $60,000; total material cost is 120,000kg x $4 = $480,000. (I am assuming that the material used is in kg – you have not typed the units. If it is in $’s then it does not need multiplying by $4)
So, the absorption rate for department S is 60/480 = $0.125 per $ of material.
In the same way, you can calculate the absorption rate for department T.To get the cost per unit, for S overheads it will be $0.125 x 12 = $1.50
You can do the same for the work done in T and add the two together.
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