Job 118 footed on 2nd January and finished on 12th January. The company cost records shows the following information concerning the job?
Machining & Assembly
Direct material: A RM17,500 & RM12.250
Direct material: B RM19,000 & RM13,720
Direct labour cost : RM15,500 & RM7,000
Direct expenses Special machine used : RM3,000
Activity : 2,100 machine hours & 1,500 direct labour hours
Selling and distribution expenses, administration expenses and financial expenses are 30%, 20% and 15% of the total production cost.
b. Calculate the total overhead cost applied to Job 118 The answer must be in Rm 231,206.25
Total Direct Material Cost: RM17,500 + RM19,000 = RM36,500
Total Direct Labour Cost: RM15,500
Total Direct Expenses: RM3,000
Total Direct Cost: RM36,500 + RM15,500 + RM3,000 = RM55,000
Total Machine Hours: 2,100
Total Direct Labour Hours: 1,500
Overhead Rate per Machine Hour = Total Direct Material Cost / Total Machine Hours
Overhead Rate per Machine Hour = RM36,500 / 2,100 = RM17.38
Overhead Rate per Direct Labour Hour = Total Direct Labour Cost / Total Direct Labour Hours
Overhead Rate per Direct Labour Hour = RM15,500 / 1,500 = RM10.33
Total Overhead Cost = (Overhead Rate per Machine Hour x Actual Machine Hours) + (Overhead Rate per Direct Labour Hour x Actual Direct Labour Hours) + Selling and distribution expenses + Administration expenses + Financial expenses
Total Overhead Cost = (RM17.38 x 2,100) + (RM10.33 x 1,500) + (30% + 20% + 15%) x RM55,000
Total Overhead Cost = (RM36,558 + RM15,495) + RM16,500
Total Overhead Cost = RM52,053 + RM16,500
Total Overhead Cost = RM68,553
Total Cost of Job 118 = Total Direct Cost + Total Overhead Cost
Total Cost of Job 118 = RM55,000 + RM68,553
Total Cost of Job 118 = RM123,553
Therefore, the total overhead cost applied to Job 118 is RM68,553.00.