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Dear SIr/Madam,
Please advise:
Q3 Answer: Set up =15 x $336,000/28=180,0000
Inspection cost=3x$192,000/8 = 72,000
Other OH=96,000 x $230,400/115,200=192,000
Total =$444,000
OH per unit for Q = $444,000/9600 =$46.25Please advise how to get 115,200. and 9600. Thank you.
ChiaOther overheads are absorbed on the basis of labour hours. The total labour hours for Product P are 2,400 x 8 = 19,200, and for Q are 9,600 x 10 = 96,000.
So the total = 19,200 + 96,000 = 115,200.9,600 is the number of units of Q that are produced and is given in the question.
I do suggest that you watch our free lecture – they are a complete course for Paper F5 and cover everything needed to be able to pass the exam well. My ABC lecture works through a very similar example to the question that you are asking about.
You certainly should not attempt the practice tests without having watched the lecture first.
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