BCF Ltd manufactures a product known as a Grunge. Direct material and labour costs for each Grunge are €300 and €150 respectively. To produce a Grunge requires 20 hours, comprising 10 hours in machining, 7 hours in assembly and 3 hours in finishing. Information for each department is:
|
Machining |
Assembly |
Finishing |
|
|
Overhead costs (E) |
120,000 |
80,000 |
30,000 |
|
Labour hours |
20,000 |
10,000 |
10,000 |
Calculate the cost of producing a Grunge using a departmental overhead recovery rate.