The following data relate to a manufacturing department for a period:
|
Budgeted Data Rs. |
Actual Data Rs. |
|
|
Direct material |
1,00,000 |
1,40,000 |
|
Direct labour |
2,00,000 |
2,50,000 |
|
Production overhead |
2,00,000 |
2,30,000 |
|
Direct labour hours |
50,000 |
62,500 |
|
Machine hours |
40,000 |
50,000 |
Job ZX was one of the jobs worked on during the period. The actual data relating to this job were:
|
Direct material |
Rs. 6,000 |
|
Direct labour |
Rs. 3,000 |
|
Direct labour hours |
750 |
|
Machine hours |
750 |
Required:
- Calculate the production-overhead absorption rate predetermined for the period based on:
- Percentage direct-material cost.
- Machine hours.
- Calculate the production overhead cost to be charged to job ZX based on the rates calculated under (a) above.
- Assuming that the machine hour rate of absorption is used, calculate the under- or over-absorption of production overheads for the period and state the appropriate treatment in the accounts.