Kaplan Exam kit - question 44 — OpenTuition Forums

Fflower15y ago

Hi

Could anybody explain how to calculate variable overheads material and labour related under current basis ?

It says that company is using for absorbing these costs company wide percentages ?

What does it mean ?

thank you.

Aantoniorasco15y ago#1

Total overheads = 2400k
Direct materials o/h = 2400k x 30% = 720k

Total direct material cost = 450k + 150k + 1200k = 1800k

Direct materials o/h per product:
- Fountain = 720k x 450k / 1800k = 180k
- Per unit = 180k / 2000 = 90

Labour follows the same logic.

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