Direct Labour Hours

Budgeted M. O.C 950

Budgeted Suitable Base (Hours or Cost) 500
Absorption Rate/POR 1.9

Production Cost
1 DM (1000 x 80% x 2kg xN$ 3.5) 5,600
2 DL (1000 x 80% x 0.75hr x N$ 8) 4,800
3 Applied Manufacturing Overhead Cost 1,140
( N$1.9x 1000 x 80% 0.75 hours)
4800 x 22%
Total Manufacturing Cost 11,540
Units Produced 800
Cost Per Unit 14.43
Add: Mark Up of 25% 3.61
Selling Price 18.03

Sales 14,425.00
Less: Cost of Sales 11,540
Gross Profit before Adjustments 2,885.00
Under/ Over applied Overhead (60)
Gross Profit 2,825.00

Actual Overhead 1200

Applied Overhea 1,140
Under / Over (60)
Direct Labour Cost
950 Budgeted Units
4,250 Budgeted Std Hour
22% Budgeted Hours
Standard Labour Rate
Budgted Cost
Produced 80%

5,600
4,800 Budgted Units
1,072.94 Actual Units Prod
Requires 2kg
Cost Per kg N$ 3.5
11,473
800
14.34
3.59
17.93

14,341.18
11,473
2,868.24
(127.06)
2,741.18

(83.82)
(0.10)

1200
1,072.94
(127.06)
1000
0.5
500 400
8.5 8.5
4250 3,400
3400

1000
800 Uniuts
1600 Kg for 800 units
5600
600
4800