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Hi sir, hope you are well. please explain to me how to calculate the general ohs in this question as i am slightly confused. thanks.
The question tells you that the general overheads are $900,000 and that these are to be absurd on a labour hour basis. It also says that the total labour hours are 300,000.
Therefore the overheads per hour are $900,000/300,000 = $3 per hour.You are told that ZT3 takes 10 minutes of labour. Given there are 60 minutes in a hour, each unit takes 10/60 = 1/6 hours.
1/6 hours x $3 per hour = $0.50 per unit.
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