Model: Combination of Labour hour and Machine hour methods
The following information relates to the activities of a production department for a certain period in a factor:
| Materials used | 36,000 | |
| Direct wages | 30,000 | |
| Hours of machine operation | 10,000 | |
| Labour hours worked | 12,000 | |
| Overheads chargeable to the department | 24,000 |
On one order carried out in the department during the period, the relevant data collected were as follows:
| Materials used | 2,000 | |
| Direct wages | 1,650 | |
| Labour hours | 825 | |
| Machine hours | 600 |
You are required to prepare a comparative statement of cost of this order by using the following three methods of recovery of overheads:
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