Question - Jardine Ltd is developing factory overhead rates for the coming year. Budgeted overhead costs for the five factory departments are as follows:
|
|
Cost ($)
|
Cost Driver
|
|
Milling
|
79,500
|
Machine hours
|
|
Finishing
|
84,600
|
Direct labour hours
|
|
Maintenance
|
40,500
|
Repair hours
|
|
Factory storeroom
|
52,800
|
Requisitions
|
|
Factory office
|
37,800
|
No. of employees
|
|
Total
|
$295,200
|
|
Estimated operating statistics for the coming year are:
|
Departments
|
Repair hours
|
No. of Requisitions
|
No. ofemployees
|
Machinehours
|
Direct labourHours
|
|
Production:
|
|
|
|
|
|
|
Milling
|
5,000
|
420
|
10
|
7,500
|
12,750
|
|
Finishing
|
2,500
|
240
|
8
|
4,000
|
11,250
|
|
Support:
|
|
|
|
|
|
|
Maintenance
|
400
|
80
|
2
|
|
|
|
Factory storeroom
|
600
|
40
|
2
|
|
|
|
Factory office
|
200
|
40
|
2
|
|
|
|
Total
|
8,700
|
820
|
24
|
11,500
|
24,000
|
Required:
(a) Calculate a plant-wide overhead rate based on direct labour hours.
(b) Calculate departmental overhead rates assuming the support departments' costs are allocated using the direct method.