Page 80 - BA2 Integrated Workbook - Student 2017
P. 80
Chapter 5
(W1) Fixed overheads:
ABC uses ($30 ÷ $10) = 3 hours per unit
XYZ uses ($60 ÷ $10) = 6 hours per unit
Total labour hours = (3 ×400) + (6 × 250) = 2,700 hours
OAR = $27,000 ÷ 2,700 = $10
ABC absorbs fixed overhead per unit of $10 × 3 = $30
XYZ absorbs fixed overhead per unit of $10 × 6 = $60
Go over illustration 2
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