The budgeted working conditions of a cost Centre are as follows:
|
Normal working per week |
42 hours |
|
No. of machines |
14 |
|
Normal weekly loss of hours on |
|
|
maintenance etc. |
5 hours per machine |
|
No. of weeks worked per year |
48 |
|
Estimated annual overheads |
2,48,640 |
|
Estimated direct wage rate |
8 per hour |
Actual results in respect of a week period are:
|
Wages incurred |
18,000 |
|
Overheads incurred |
20,400 |
|
Machine hours produced |
2,000 |
You are required to calculate:
(i) The overhead rate per machine hour; and
(ii) The amount of under or over absorption of wages and overheads.