following are the figures that have been extracted from the books of a manufacturing 618446

Following are the figures that have been extracted from the books of a manufacturing company. All jobs pass through the factory’s two departments.

Working Department Rs.

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Finishing Department Rs.

Materials used (Rs.)

6,000

500

Direct labour (Rs.)

3,000

1,500

Factory overheads (Rs.)

1,800

1,200

Direct labour hours (Hrs)

12,000

5,000

Machine hours (Hrs)

10,000

2,000

The following information relates to Job No. 10:

Working Department

Finishing Department

Materials used (Rs.)

120

10

Direct labour (Rs.)

65

25

Machine hours (Hrs)

255

25

Direct labour hours (Hrs)

265

70

You are required to:

  1. Enumerate four methods of absorbing factory overheads by jobs, showing the rates of each department under the methods quoted.
  2. Prepare a standard showing the different costs resulting for a Job No. 10 using any of the two methods referred above.

(i)

Material-cost method:

Percentage on material cost

30%

240%

Factory overheads (Rs.)

36

24

(ii)

Labour cost method:

Percentage on direct wage cost

60%

80%

Factory overheads (Rs.)

39

20

(iii)

Labour-hour-rate method:

Direct hour rate (Re. per hour)

0-15

0-24

Factory overhead (Rs.)

39-75

16-80

(iv)

Machine-hour-rate method:

Machine hour rate (Re. per hr)

0-18

0-60

Factory overhead (Rs.)

45.90

15

Total cost for Job No. 10:

(i)

Material-cost method (Rs.)

221

59

(ii)

Labour-cost method (Rs.)

224

55

(iii)

Labour-hour-rate method (Rs.)

224-75

51-80

(iv)

Machine-hour-rate method (Rs.)

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