Using the information in Annex 2, prepare an overhead summary, showing clearly the total overheads for each department. Prepare the following calculations using the total overhead for each department: i. Calculate the Overhead Absorption Rate (OAR) based on Labour hours. ii. Calculate Overhead Absorption Rate (OAR) based on number of units (for 3000 units) iii. Calculate the Total Cost per unit from the available information (use OAR based on cost per unit)
Using the information in Annex 2, prepare an overhead summary, showing clearly the total overheads for each department. Prepare the following calculations using the total overhead for each department: i. Calculate the Overhead Absorption Rate (OAR) based on Labour hours. ii. Calculate Overhead Absorption Rate (OAR) based on number of units (for 3000 units) iii. Calculate the Total Cost per unit from the available information (use OAR based on cost per unit)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1) Using the information in Annex 2, prepare an overhead summary, showing clearly the total
each department:
i. Calculate the Overhead Absorption Rate (OAR) based on Labour hours.
ii. Calculate Overhead Absorption Rate (OAR) based on number of units (for 3000 units)
iii. Calculate the Total Cost per unit from the available information (use OAR based on cost
per unit)
Transcribed Image Text:Annex 1.
Raaje Fresh provides the following information relating to their ourent operations (3000 units) for a
given period of time:
MVR
25782.6
3000 Bottles price
2 years Website hosting
Sickers printing price
Shipment af stickers
Delivery Order charges
Customs duty
Clearance
1201.28
5723.45
2280
3793.32
744
300
Shipping documentation
MPL charges
Rent of warehouse
Wages
Raw Materials
413
554.38
6500
3000
4000
Unit Seling price
231
Transcribed Image Text:Annex 2.
The following averhead information is also
available
Production Packing Administration
Direct Costs (MVR)
Overheads (MVR)
Administration Usage (in %)
7,000 34,530.05
6,500
1201.28
20%
4500 hrs
5,120.7
80%
1500 hrs
Labour hours
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