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1
Assignment
Student’s Name
Institution
Course Code: Course Name
Instructor’s Name
Date
2
QUESTION ONE
Part 1
Using the traditional costing system,
Rate of overhead allocation = Total manufacturing overheads / Total machine hours
=SR 750,000/9,500 hrs
= 78.95 SR/hr
Product A
Product B
Product C
Material cost/unit
20
25
30
Labor cost/unit (direct labor rate*direct
7.5
5
2.5
labor hours)
(5*1.5)
(5*1)
(5*0.5)
Overhead allocation (machine hours per
39.475
118.475
78.95
unit*overhead allocation rate)
(78.95*0.5)
(78.95*1.5)
(78.95*1)
The total cost = material cost per unit + Labour cost per unit + overheads allocated.
Total cost for;
Product A= 20 + 7.5 + 39.475 = SR 66.975
Product B = 25 + 5 + 118.425 = SR 148.425
Product C = 30 + 2.5 + 78.95 = SR 111.45
Product A
Overhead allocated= machine hours * overhead allocation rate
= 500hrs * 78.95 SR/hr = 39,475 SR
Overhead allocated per unit = Overhead allocated / volume of production.
= 39,475 /1,000 = 39.475 SR
3
Product B
Overhead allocated= machine hour...