Engineering Products plc produces Product GH1, which incurs costs of d150 for direct materials and £75 for direct labour. The company has estimated its production overhead and direct labour hours for a period as:
|
Dept A |
Dept B |
Dept C |
|
|
Overheads |
150,000 |
200,000 |
125,000 |
|
Direct labour hours |
5,000 |
10,000 |
5,000 |
Product GH1 is produced using 10 hours in Dept A, 12 hours in Dept B and 5 hours in Dept C.
Calculate the total cost of each GH1 using:
- a plant-wide overhead recovery rate; and
cost centre overhead recovery rates.