OAR QUESTION

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July 31, 2023 at 12:22 pm #689186
Anonymous
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the following information is available:
Allocated $13122
Apportioned $7920
Reapportioned from service cost centres $2988
216000 units of product are manufactured at a rate of 120 units per machine hour.
Req: calculate the OAR per machine hour.
Please advise on this.
September 27, 2023 at 6:11 am #692559
abdulvarisvk234
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Total fixed production cost=13122+7920+2988=24030
120 units takes 1 hour, so we are having 216000.
so, it takes 1800 hours, cuz, 216000/120.
so now u have got hours and total production overhead.
24030/1800=13.35$/machine hour is the OAR per machine hour here.
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