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27 The following information is available in respect of department 1.
actual forecast
direct labour hours 45 000 40 000
machine hours 12 000 10 000
overheads to be apportioned to department 1 $90 000
The company has been asked to quote for an order. The expected time taken in department 1 will
be four direct labour hours and seven machine hours.
How much overhead should be charged to the order as it passes through department 1?
A $8.00 B $9.00 C $52.50 D $63.00do u take 90000/40000*4 or 90000/10000
help
This is a Paper F2 question, not really Paper F5.
You would absorb the overheads on the basis of the budgeted labour hours, so 90,000/40,000 = $2.25 per hour, and charge them to the order on this basis. So 4 x 2.25 = $9 will be charged to the order.
Why are you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers – they are full of exam standard questions, together with answers and explanations.
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