Using the OAR data calculated for Rand Ltd we can calculate the following job. An order was received for 500 steel pipes. The costing data for this order is as follows:
|
Direct costs per steel pipe Don't use plagiarized sources. Get Your Custom Essay on
using the oar data calculated for rand ltd we can calculate the following job an ord 611279
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|
£ |
|
Direct materials |
4.50 |
|
Direct labour |
6.00 |
The job passes through each of the production departments as follows:
|
Machine hours |
Direct labour hours |
|
|
Cutting |
200 |
70 |
|
Moulding |
350 |
90 |
|
Assembly |
110 |
The cost of this particular job would then be calculated as follows:
|
Direct costs: Materials |
500 x £4.50 |
£ 2,250.00 |
|
Labour |
500 x £6.00 |
3,000.00 |
|
Indirect costs: |
||
|
Cutting overheads |
200 hours x £0.27 |
54 |
|
Moulding overheads |
350 hours x £1.33 |
465.5 |
|
Assembly overheads |
110 hours x £3.12 |
343.2 |
|
Total cost |
500 steel pipes |
6112.7 |
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