Question 01

Following figures are presented to you by Toseef manufacturing Company:

Items

Budgeted Figures for operations During 2006

Actual Figures for operations during January 2006

Dept A

Dept A

Direct materials (Rs )

2,400,000

250,000

Direct Labor (Rs.)

1,200,000

105,000

Factory overhead (Rs.)

1,800,000

9,500

Direct labor hours

100,000

28,000

Machine hours

360,000

Required: Calculate predetermined factory overhead absorption rates for the departments using five different bases. (Present your answer by enlisting the rates in descending order of approximate frequency of their use).

(Marks: 05)

Question 02

From the following data calculate the over/under absorption and show how the transactions would be recorded in the production overhead account.

Absorption rate = Rs.8.00 per direct labor hour

Number of direct labor hours = 1,200

Production overhead incurred = Rs. 6,900

(Marks: 05)