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Question - A production department has the following budgeted information: overheads - $20,000 (after allocation and apportionment) production - 2,500 units labour - 1,000 direct labour hours (dlh) machine time - 1,000 machine hours.
Actual data for one unit of the product are as follows: $20 of direct material cost was incurred. direct labour hour rate paid - $4 per labour hour ½ a direct labour hour or 30 minutes of direct labour were used. 2 machine hours of time were utilized.
Required -
1. What is the cost of producing one unit of the product if overheads are absorbed on the direct labour hour basis?
2. What is the cost of producing one unit of the product if overheads are absorbed on the machine hour basis?
3. What is the cost of producing one unit of the product if overheads are absorbed on the unit of output basis?
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