Solution-Calculate the overhead absorption rates for each

Calculate the overhead absorption rates for each department

Reference no: EM133117931

Question - EPZ Garments Ltd. Manufactures custom-made suits tailored to the requirements of each Customer. They use predetermined overhead absorption rates in allocating overheads to each job. In the cutting department, the rate is based on direct labour hours and in the stitching department the rate is based on machine hours. The management of EPZ Garments Ltd., wants to set overhead absorption rates to help in determining prices in the next financial year.

The cost accountant has provided the following budgeted data for the next financial year.

	Cutting	Stitching
Direct labour cost	Shs.1,200,000	Shs.750,000
Factory overhead	Shs.1,500,000	Shs.1,620,000
Direct labour hours	60,000	30,000
Machine hours	-	40,000

Required - Calculate the overhead absorption rates for each department?

Reference no: EM133117931

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Calculate the overhead absorption rates for each department

Reference no: EM133117931

Reference no: EM133117931

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