Kaplan Exam kit – question 44

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June 5, 2011 at 8:03 pm #48950
flower
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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.
June 7, 2011 at 1:53 pm #83184
antoniorasco
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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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