Given: Total budgeted overheads = Shs.240,000
Production budget is as follows:
Product A B
Units 20,000 10,000
Labour hours 20,000 20,000
Labour cost Shs.17,500 Shs.22,500
Machine hours 45,000 15,000
Material cost Shs.15,000 Shs.25,000
Required
Compute the overhead absorption rate per unit of A and B using the following methods:
a) Unit method
b) Percentage on material cost
c) Percentage on labour cost
d) Percentage on prime cost
e) Labour hour rate
f) Machine hour rate