Sankalp Industries absorbs factory overhead costs at Rs. 2.50 per direct labour hour. Both opening and closing balances of WIP and finished goods inventories are zero. Following are the data available for a year and the fact is that all goods produced have been sold. Direct labour hours used 50,000 Direct labour cost Rs. 1,00,000 Indirect labour cost Rs. 25,000 Indirect materials cost Rs. 10,000 […]

The monthly budget of a department is as follows: Direct materials Rs. 45,000 Direct wages Rs. 60,000 Overheads Rs. 90,000 Direct labour hours 15,000 hours Machine hours 30,000 hours Find out the overhead-recovery rate based on: Direct materials-cost method Direct labour-cost method Prime-cost method Machine-hour-rate method.

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. 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 […]

XYZ company uses historical cost system and applies overheads on the basis of predetermined rates. The following data are available from the records of the company for the year that ended on 31 March 2010. Manufacturing overhead 8,50,000 Manufacturing overhead absorbed 7,50,000 WIP 2,40,000 Finished goods stock 4,80,000 Cost of goods sold 16,80,000 Apply the methods of disposal of under-absorbed overheads and show how they […]

From the following particulars, compute the machine hour rate: Cost of the machine 11,000 Strap value 680 Repairs for the effective working life 1,500 Standing charges for 4-weekly period 40 Effective working life 10,000 hours Power used: 6 units per hour at paise per unit 5 Hours worked in 4-weekly period hours 120

Compute machine hour rate from the following data: Rs. Cost of the machine 1,44,000 Installation charges 6,000 Estimated scrap value at the end 6,000 Effective working life of the machine 12,000 hours Estimated repairs over the effective working life of the machine 12,000 Standing charges allocated to the machine per year 5,760 Power bill per year 7,200 Power consumed by the machine is 20 units […]

Calculate machine hour rate of Machine A: Consumable stores 600 for Machine A Consumable stores 1,000 for Machine B Repairs 800 for Machine A Repairs 1,200 for Machine B Heat and Light 360 Rent 1,200 Insurance of building 4,800 Insurance of machines 800 Depreciation of machines 700 Room service 60 General charges 90 Additional information: Machine A Machine B Working hours (hours) 10,000 25,000 Area […]

From the data given below, calculate the machine hour rate: Rs. Rent of the department (Space occupied by machine1/5th of the department 780 p.a. Lighting (No. of men in the department 12, two men engaged on this machine) 288 p.a. Insurance, etc. 36 p.a. Cotton, waste, oil, etc 60 p.a. Salary of foreman 6,000 p.a. One fourth of the foreman’s time is occupied by the […]

From the following particulars, compute the machine hour rate Rs. Cost of the machine 30,000 Estimated scrap value after the expiry of its life of 5 years 3,000 Rent and rates of the department 2,000 General lighting of the department p.m. 200 Salary of the supervisor p.m. 1,500 Power consumption is 5 units at the rate of 60 paise per unit. Estimated working hours of […]

There are five identical machines in a work shop. The annual charges paid for them are as follows: Rent and rates in proportion to floor space occupied Rs. 4800 Depreciation for each machine Rs. 500 Power consumed as per metre @ 5 paise per unit for the shop Rs. 3,000 Repairs and maintenance for 5 machines Rs. 1,000. Electric charges for the light in the […]