Total Direct Material Cost: RM17,500 + RM19,000 = RM36,500
Total Direct Labour Cost: RM15,500
Total Direct Expenses: RM3,000
Total Direct Cost: RM36,500 + RM15,500 + RM3,000 = RM55,000
Total Machine Hours: 2,100
Total Direct Labour Hours: 1,500
Overhead Rate per Machine Hour = Total Direct Material Cost / Total Machine Hours
Overhead Rate per Machine Hour = RM36,500 / 2,100 = RM17.38
Overhead Rate per Direct Labour Hour = Total Direct Labour Cost / Total Direct Labour Hours
Overhead Rate per Direct Labour Hour = RM15,500 / 1,500 = RM10.33
Total Overhead Cost = (Overhead Rate per Machine Hour x Actual Machine Hours) + (Overhead Rate per Direct Labour Hour x Actual Direct Labour Hours) + Selling and distribution expenses + Administration expenses + Financial expenses
Total Overhead Cost = (RM17.38 x 2,100) + (RM10.33 x 1,500) + (30% + 20% + 15%) x RM55,000
Total Overhead Cost = (RM36,558 + RM15,495) + RM16,500
Total Overhead Cost = RM52,053 + RM16,500
Total Overhead Cost = RM68,553
Total Cost of Job 118 = Total Direct Cost + Total Overhead Cost
Total Cost of Job 118 = RM55,000 + RM68,553
Total Cost of Job 118 = RM123,553
Therefore, the total overhead cost applied to Job 118 is RM68,553.00.
Job 118 footed on 2nd January and finished on 12th January. The company cost records shows the following information concerning the job?
Machining & Assembly
Direct material: A RM17,500 & RM12.250
Direct material: B RM19,000 & RM13,720
Direct labour cost : RM15,500 & RM7,000
Direct expenses Special machine used : RM3,000
Activity : 2,100 machine hours & 1,500 direct labour hours
Selling and distribution expenses, administration expenses and financial expenses are 30%, 20% and 15% of the total production cost.
b. Calculate the total overhead cost applied to Job 118 The answer must be in Rm 231,206.25
1 answer