In: Accounting

# Jardine Ltd is developing factory overhead rates for the coming year. Budgeted overhead costs for the...

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. of employees Machine hours Direct labour Hours 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.

## Solutions

Solution a:

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