Reference no: EM132960314
The following is the budget for the year 2012 from Tembo Ltd
Factory overheads Shs.62,000
Direct labour cost Shs.98,000
Direct labour hours 155,000
Machine hours 50,000
Actual labour hours were 40,000
Actual machine hours were 30,000
Actual direct labour costs were Shs.50,000
Actual direct material costs were Shs.45,000
Required
Problem 1: Determine:
a) The overhead application rate on the basis of
i. Direct labour hours
ii. Direct labour cost
iii. Machine hours,
b) Overhead costs based on the absorption rates above
c) Production cost