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Hi, I do not understand on part (b)
General O/H : Why? 9,000 / 6 & then 1,500 hrs/ 9000 units x $3/unit = $0.50/unit
Overheads : Set ups are 10 runs?
Please advice.
Thank you.
Each unit take 10 minutes to make. They are making 9,000 units of ZT3 (see working (1)).
So the total time taken is 9000 x 10/60 (there are 60 minutes in an hour) = 1500 hours.Since overheads are $3 per hour (first line of workings 3), the total overheads for ZT3 will be 1500 hours x $3 = $4500, and since there are 9,000 units this is $0.50 per unit.
There are 10 runs because 9,000 units are being produced and they are produced in batches of 100 each time (per the question).
Hope that helps 🙂
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