Accounting question involving overhead costs

UK Discussion in 'Exams and Studying' started by Girlonlne, Jan 1, 2018.

  1. Girlonlne

    Girlonlne

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    https://imgur.com/a/BTnhX

    Hi,

    I have only started learning about accounting not long ago, so I'd like some help please. The link above shows a question that I am not completely sure about. If the total direct labour hour is 160000 for the basic quality and 60000 for super quality, the total direct labour hour will be 220000hrs. Thus the overhead recovery rate is £4.545 per direct labour work. I don't get why when calculating the overhead cost for both qualities, 160000 and 60000 are not used.

    Instead, overhead costs = 4.5454 and 4.5456.

    Thanks.
     
    Girlonlne, Jan 1, 2018
    #1
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