Computation of overhead recovery rate, Cost Accounting

Assignment Help:

Compute the rate to be used in each department for applying overhead in both departments

Budegeted Cost sheet

 

Amount in $

 

Dept. A

Dept. B

Direct materials

       120,000

          150,000

Direct labor

         37,500

          145,000

Prime Cost

       157,500

          295,000

Overheads

       122,500

          100,000

Total Product cost

       280,000

          395,000

 

 

 

 

2

Computation of total budgeted labor cost for department B

 
 

 

Amount in $

 
 

 

Dept. B

 
 

Total product cost

       395,000

 
 

Less: direct materials

       150,000

 
 

Less: Overheads

       100,000

 
 

 

 

 
 

Budgeted labor cost for department B

       145,000

 
 

 

 

 
       
 

Computation of overhead recovery rate:

 

 

 

 

Dept. A

Dept. B

 

Total overheads (a), $

       122,500

          100,000

 

Basis of recovery

labour hours

machine hours

 

Budegted labor / machine hours (b)

           2,500

              5,000

 

Overhead recovery rate (a/b)

           49.00

              20.00

       

Related Discussions:- Computation of overhead recovery rate

What is operating income under absorption costing, Loring Company had the f...

Loring Company had the following data for the month: Variable costs per unit: Direct Materials $4 Direct Labor 3.20 Variable Overhead 1 Variable selling expense 0.40 Fixed Ov

Calculate the equivalent annual cost, A plant is considering the replacemen...

A plant is considering the replacement of a piece of equipment in its materials handling system with a new piece. If the company's cost of capital is 10%. Should the present asset

Gross rental revenue, Operating Income 1. Operating Income is derived f...

Operating Income 1. Operating Income is derived from two sources, Rental Income from businesses operating in the warehouse complex and Interest Income of the project operating

Classification, what is the classification of cost & how it is done?

what is the classification of cost & how it is done?

Example of economic order quantity, Example of Economic Order Quantity ...

Example of Economic Order Quantity The EOQ model supposes : - Annual demand is recognized - Hold costs are constant and recognized - Ordering costs are recognized a

Calculate break even point using a mathematical equation, Smart Ltd ha sa u...

Smart Ltd ha sa unit selling price of $500 variable costs per unit of $325 and fixed costs of $140 000. Calculate the break even point in units using (a) a mathematical equations a

Prepare the material cost budget of products of a company, Prepare the Mate...

Prepare the Material Cost Budget of products of a Company For a company along with many products, a periodic budget would be developed given as: Assume a firm has 3 products X

Show the objective of accounting standards, A sound foundation is necessary...

A sound foundation is necessary for success in any task from building a house to putting on make up. In terms of U.S Accounting standards it is necessary to have a sound foundatio

Cash, This is difficult to perceive cash maintained in the vault as an inve...

This is difficult to perceive cash maintained in the vault as an investment. Fairly, you would be thinking that if we invest cash, then how can cash itself be an investment? Howeve

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd