McKinsey Machines Ltd manufactures a single product A. It has two cost centers namely molding department...
McKinsey Machines Ltd manufactures a single product A. It has two cost centers namely molding department and painting department.
|
Information |
Molding Department |
Painting Department |
|
Total Manufacturing overheads |
$ 1,806,000 |
$ 2,205,000 |
|
Total Machine hours (estimated) |
210,000 |
|
|
Total Direct Labour Cost |
$ 1,260,000 |
McKinsey Ltd executes job no. 410. The cost and output details of Job No.410 are given below:
|
Information |
Molding Department |
Painting Department |
|
Direct Materials |
$ 1,410 |
$ 996 |
|
Direct Labour |
$ 870 |
$ 2,040 |
|
Number of machine hours used in job no. 410 |
330 hours |
|
|
Output (units) (expected to be received from Job No. 410) |
150 units |
|
Overheads allocation to Job No. 410 will be as follows:
(a) Molding department overheads will be allocated based on machine hours
(b) Painting Department overheads will be allocated using direct labour costs (as a percentage).
Required
(1) Calculate overhead absorption rate for Molding Department and Painting Department based on allocation bases given above
Homework Answers
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McKinsey Machines Ltd manufactures a single product
A. It has two cost centers namely molding
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