The production department of a factory furnishes the following information for the month of October, 2020.
| Rs. | Hours | |
| Materials used | 54000 | |
| Direct wages | 45000 | |
| Overheads | 36000 | |
| Labour hours worked | 36000 | |
| Machine hours worked | 30000 |
For an order executed by the department during October, the relevant data is as follows:
| Rs. | Hours | |
| Materials used | 6000 | |
| Direct wages | 3200 | |
| Labour hours worked | 3200 | |
| Machine hours worked | 2400 |
Calculate the over heads chargeable to the job by (a) Direct Materials Cost Method, (ii) Direct Labour Cost Method, (iii) Labour Hour Rate, and (iv) Machine Hour Rate.
To calculate the overhead chargeable to the job, the four methods are:
(a) Direct Materials Cost Method:
The overhead chargeable to the job is calculated by multiplying the total overhead by the ratio of the cost of direct materials used for the job to the total cost of direct materials used for the month.
Overheads chargeable to the job = (Overheads / Total direct materials cost) * Direct materials cost for the job
= (36000 / (54000 + 6000)) * _______ ______ __________ __________ ________ ___ _____.
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