1. LMN Ltd has the following datarelating to its assembly plant for the year to

Question

1.      LMN Ltd has the following datarelating to its assembly plant for the year to 31 March Year 7:

£

Material costs

1,000,000

Direct labour costs

500,000

Assembly plant indirect costs

200,000

Inaddition, the stores departments has total costs of£60,000, and spends 50% of its time servicing the assemblyplant. In Year 7, there were 100,000 labour hours worked and 50,000machine hours run in the assembly plant. What was the overhead costper direct labor hour?

£

Material costs

1,000,000

Direct labour costs

500,000

Assembly plant indirect costs

200,000

Explanation / Answer

(£200,000 + £30,000)/(100,000 labour hours) = £2.30 per hour. Answer: £2.30 per hour.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.