a company makes a range of products with total budgeted manufacturing overheads of $900,000 incurred in three production (a,b, and c) and one service department.
accounting
Description
a company makes a range of products with total budgeted manufacturing overheads of $900,000 incurred in three production (a,b, and c) and one service department.department a has 11 direct employees who each work 35 hours per week. department b has 7 machines each of which is operated for 24 hours per week. department c is expected to produce 148,000 units of final product in the budget period.the company will operate for 50 weeks in the budget period.budgeted overheads incurred directly by each department are:production
department a $261,745
department b $226,120
department c $93,890
service department d $53,305
the balance of budgeted overheads are apportioned to departments as follows:
production department a 40%
production department b 35%
production department c 20%
service department d 5%
service department overheads are apportioned equally to each production department require:
(a)calculate an appropriate predetermined overhead absorption rate in each production department.
(b)calculate the manufacturing overhead cost per unit of finished product in batch of 100 units which take nine direct labour hours in department a and three machine hours in department b to produce.
