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Question: A furniture making business manufactures quality furniture to customers' orders. It has three production departments (A, B and C) which have overhead absorption rates (per direct labor hour) of RM12.86, RM12.40 and RM14.03 respectively.
Two pieces of furniture are to be manufactured for customers. Direct costs are as follows.
Job XYZ Job MNO
Direct material RM154 RM108
Direct labor. 20 hours department A 16 hours department A
12 hours department B 10 hours department B
10 hours department C 14 hours department C
Labor rates are as follows: RM3.80 (A); RM3.50 (B); RM3.40 (C)
Calculate the total cost of each job.
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