Question

Assume the following information for the G. Long Company (all estimated figures) Factory Overhead Cost $425.000...

Assume the following information for the G. Long Company (all estimated figures)

Factory Overhead Cost $425.000

Units of production $500.000

Direct material cost $1.000.000

Direct labour cost $1.500.000

Direct labour hours    $250.000

Machine hours   $110.000

Required: Compute the factory OH application rate for the G. Long Company under the following bases:

a) Unit of production

b) Direct material cost

c) Direct labour cost

d) Direct labour hours

e) Machine hours

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Homework Answers

Answer #1

Factory OH application rate for the G.Long Company under the following bases

a) Unit of Production

Factory OH application rate = Factory Overhead Cost / Units of production

= $425,000 / $500,000

= $0.85

b) Direct Material Cost = Factory Overhead Cost /  Direct Material Cost

=$425,000 / $1,000,000

= $0.425

c) Direct Labour Cost =  Factory Overhead Cost /  Direct Labour Cost

=$425,000 / $1,500,000

=$0.28

d) Direct labour hours = Factory Overhead Cost /  Direct Labour hours

=$425,000 / 250,000 hours

=$1.7 per hour

e)Machine Hours =  Factory Overhead Cost / Machine Hours

=$425,000 / 110,000 hours

= $3.86 per hour

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