You are fulfilling an order for 45 units for sale at £65 per unit. This involves work in 3 cost centres - machining, assembly and finishing. Your company has established the following data: Machining Machine £13 hr OAR per hour Assembly Labour hr £8 OAR per hour Finishing Labour hr £11 OAR per hour Total direct material cost £210 Total machine time 20 hours 50 hrs £6.00 machining per hour 80 hrs £4.50 Labour assembly per hour 40 hrs £5.65 finishing per hour OAR for general overheads is 10% of total product co st Using batch costing methods, the unit cost (to the nearest pound sterling £) is: O €48 £60 £39 £33

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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You are fulfilling an order for 45 units for sale at £65 per unit. This
involves work in 3 cost centres - machining, assembly and finishing. Your
company has established the following data:
Machining
Machine
£13
hr OAR
per
hour
Assembly
Labour hr
£8
OAR
per
hour
Finishing
Labour hr
£11
OAR
per
hour
Total direct material cost £210
Total machine time
20
hours
50 hrs
£6.00
machining per
hour
80 hrs
£4.50
Labour
assembly
per
hour
40 hrs
£5.65
finishing
per
hour
OAR for general overheads is 10%
of total product co st
Using batch costing methods, the unit cost (to the nearest pound sterling
£) is:
£48
£60
£39
£33
Transcribed Image Text:You are fulfilling an order for 45 units for sale at £65 per unit. This involves work in 3 cost centres - machining, assembly and finishing. Your company has established the following data: Machining Machine £13 hr OAR per hour Assembly Labour hr £8 OAR per hour Finishing Labour hr £11 OAR per hour Total direct material cost £210 Total machine time 20 hours 50 hrs £6.00 machining per hour 80 hrs £4.50 Labour assembly per hour 40 hrs £5.65 finishing per hour OAR for general overheads is 10% of total product co st Using batch costing methods, the unit cost (to the nearest pound sterling £) is: £48 £60 £39 £33
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