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Question - Apparel Ltd manufactures batches of high-quality sweatshirts. The number of sweatshirts varies per job. It uses a normal job-order costing system. Estimated data for the year 20X1 were the following: Total factory overhead cost $75,000 Direct labour hours 15,000 During March 20X1, manufacturing costs for a batch of sweatshirts were as follows: Actual production 2,000 sweatshirts Direct materials $ 10 per sweatshirt Direct labour 1/2 hour per sweatshirt at $7 per labour hour.
Required -
a) Determine the pre-determined overhead rate based on direct labour hours.
b) What is the total cost of the March 20X1 production of sweatshirts?
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