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Compute the rate to be used in each department for applying overhead in both departments
Budegeted Cost sheet
Amount in $
Dept. A
Dept. B
Direct materials
120,000
150,000
Direct labor
37,500
145,000
Prime Cost
157,500
295,000
Overheads
122,500
100,000
Total Product cost
280,000
395,000
2
Computation of total budgeted labor cost for department B
Total product cost
Less: direct materials
Less: Overheads
Budgeted labor cost for department B
Computation of overhead recovery rate:
Total overheads (a), $
Basis of recovery
labour hours
machine hours
Budegted labor / machine hours (b)
2,500
5,000
Overhead recovery rate (a/b)
49.00
20.00
Please kindly post some problems along with solutions so it is easy to understand..I am quite satisfied by the per-forma you have mentioned.. THANK YOU.
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