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Dear sir,
I do have watched your lectures concerning accounting for overheads and I just want to know what is the difference between ” absorbed on a labour hour basis” and “absorbed per direct labour basis”?Thanks in advance.
1.Direct labour = 15 minutes at $8 per hour (15 mins=0.25 hr)
Variable factory overhead =Absorbed at $14.00 per direct labour hourTherefore, the amount for VFO is: 14/0.25 hrs
= $56-Is my answer correct?
No.
How on earth can 0.25 of an hour be costing more than 1 hour costs ???
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