Chapter 5: Overhead 155

Solved Examples:
S5-1:
BBA NU 2011
Engineering Company Padma having 3production departments P, Q&R and one service
departments S furnishes the following particulars:
30
Taka
Rent and rates 18,000
Electricity 6,000
|Repairs to plant 9,000
Depreciation of plant 7.500 Koilol25
Power 11,200
Insurance 3,000
Medical expenses 3,400
6 202 S,/d

Workmen's compensation insurance 7,800

The following information is also available:_
P Q R
Indirect Wage(TK.) 20,000 15,000 17,500 12,500
Area(sq. ft.) 2,000 1,600 1,400 1,000
No. of employees 30 20 25 10
Value of plant(TK.) 50,000 60,000 30,000 10,000
H.P. of plants 120 55 95 10
Carry out the apportionment of overhead to the production departments assuming that
service departmet S is a canteen.

Solution:
Basis of Total Production Depart1ments Service
Items of tionmentappor amount Department
Expenses P(TK.) Q(TK.)| R(TK.) S(TK.)
Indirect Wage_ 65,00020,000 15,000 17,500 12,500
Rent&Rates Area 18,000 6,000 4,800 4,200 3,000
(5:7:8:10)
Electricity Do 6,000 2,000 1,600 1400 1,000
Repairs to plant Value of plants 9,000 3,000 3,600 1,800 600
(1:3:6:5)
Depreciation of Do 7,500 2,500 3,000 1,500 500
plant
Power H.P. of plants 11,200 4,800 3,800 2,200 400
(2:11:19:24)
Insurancee Value of plants 3,000 1,000 1,200 600 200
(1:3:6:5)
ical Med noof 3,400 1,200 800 1,000 400
Expenses employees
(2:5:4:6)
Indirect Wage
Workmen's 7,800 2400 1,800 2,100 1,500
156 Cost Accounting

compensation (5:7:6:8)
insurancc
32,300 20,100
35,600
1,30,90042,900 5,360 6,700 (20,100)
Apportionment No of employees 8,040
of service dept. S 5:4:6) -

40960 39.000
L.30,900 0,240

BBA NU 2013
S5-2
service departments S. The
A cCompany has three production departments
A, B, C and a
overhead costs incurred during a particular four week period were:
Amount Amout
(Tk.) (Tk.)
Indirect Wages and salaries:
Department A 40,000
Department B 30,000
Department C 35,000
Department S 25,000 130,000
Workmen's compensation insurance 7,800
Rent and rates 6,000
Repairs to plant and machinery 6,000
Depreciation of plant and machinery 4,500
Electricity 3,000
Power
5,600
Insurance
3,500
Medical costs 240
The following information is also available:
P Q R
Area(sq.meter) 10,000 S
8,000 7,000 5,000
No. of employees 20 12 15
Value of plant and machinery 100,000 13
Average stock value (Tk.) 120,000 60,000 20,000
120
L 20,000 15,000 15,000 000
H.P. of plants 95
15,000
55 10
Carry out the allocation and apportionment of overhead to
the production departments
assuming that service department S is a canteen.
Chapter- 5: Overhead 157

Solution:

Basis of Total Production Departments Service

Items of apportionment amount Department
Expenses P(TK.)QTK)RTK. S(TK.)
Indirect Wages 130,00040,000 30,000 35,000 25,000
and salaries
Workmen's Indirect Wage 7,800 2,400 1,800 2,100 1,500
compensation and salaries
insurance (8:6:7:5) 1,000
Rent and rates Area 6,000 2,000 1,600 1,400
(10:8:7:5) 1,200 400
Value of plants 6,000 2,000 2400
Repairs to plant|
and machinery (10:12:6:2)
Do 4,500 1,500 1,800 900 300
Depreciation of|
plant and

machinery 3000 1000 800 700 500

Electricityy Area
(10:8:7-5) 2400 1900 1100 200
Power Horse power 5600
(24:19:11:2) 233
1167 1400 700
Insurance Value of plants 3,500
(10:12:6:2) 48 60 52
Medical costs No of employees 240 80
(20:12:15:13)
166,640 52547 41748 43160 29185
Apportionment No of employees 12,419 7,451 9,315 (29185)
of service dept. S (20:12:15)
166,640 64966 49199 52475

$5-3
radma td. has three production departments A, B and C and two service depatments
and E. Manufacturing expenses for the next year are estimated as follows:

Tk. Tk.
Rent, rates & taxess 4,200 Plant repairs 3,300
Depreciation 16,500 Plant Insurance 440
Lighting 1,900 Fringe benefits 3,000
Supervision 7,500 Canteen expenses 4,500
Power
2,700
Nting
Further information relating to the
departments is given below
B C D E
Area (sq. ft.)_ 600 800 700 400 300
Value of plant (Tk.) 1,00,000 1,40,000 2,00,000
No. of employees 10 16 20 6

Horse power hours 10,000 12,000 8,000

6
| No. of points 12 15 18
4,000 6,000
40,000
Wages (Tk.) 20,000 30,000
360 95 90
Indirect materials (Tk.)|320 250
basis of area and of
EXpenses of department D are to be distributed first on the
the departmental
department E on the basis of number of employees. Prepare
distribution summary.

Solutio
Padma Itd.
Overhead distribution sheet

Expenses Apportion base | Total Production Service

department department
A B C D E
Rent rates Area 4200 900 1200 1050 600 450.
(6:8:7:4:3)
Depreciation Plant value 16500 3750 5250 7500
(5:7:10)
Lighting No. of points 1900 380 475 570 285 190
(4:5:6:3:2)
Supervision No. of 7500 1250 2000 2500 750 1000
employees
(5:8:10:3:4)
Power Horse power 2700 900 1080 720
(5:6:4)
Plant repairs Plant value 3300 750 1050 1500
(5:7:10)
Plant insurance Plant value 440 100 140 200
(5:7:10)
Fringe benefit Direct wages 3000 600 900 1200
(10:15:20:2:3) 120 180
Chapter -

5: Overhead 159

Canteen No. of 4500 750 1200 1500 450 600

expense employees
(5:8:10:3:4)
Actual 10000 4000 6000
Wages

Actual 1115 320 250 360 95 90

Indirect
material 17100 6300 8510
Total 55155 9700 13545

Service D Area 1800 2400 2100 (6300)

(6:8:7)_ 1850 2960 3700 (8510)
Service EE No. of
employees
(5:8:10) 18905 22900 Nil L Nil_
Total 55155 13350

S5-4: two service

A manufacturing concern has two production departments and
shown by the
The total factory overhead of each department as
departments.
distribution summary is given below:
departmental
Production departments: Taka
A ************** .8,000
B .. 6,000
* * e * * * * * * .

Service departments:
.4,000
********

2,000
Total 20,000

The overhead ofservicedepartmentsareapportioned

Departments B
on thefollowing basis: L

K 35% 40% 25%

L 40% 40% 20%
Y o u are
r e required
required to show the distribution of service departments overhead under the
following methods:

followepeated distribution method; and

`imultaneous equation method
160 Cost Accounting
Solution
(a)
Repeated distribution method ServiceDepartment
Particular Production
Department K L
A B
4,000 2,000
Overhead as per distribution 8,000 6,000
summery 1000
Service department 1400 1600 (4,000)
K:35 %,40%,25% 600 (3000)
L:40%40%20% 1200 1200
150
210 240 (600)
K:35%,40%,25% 60 60 30 (150)
L:40%40%20% 8
K:35%,40%,25% 10 12 (30)
L:40%40%20% 4 (8)
Nil
10.884 2116 L Nil
(b) Simultaneous equation
According to question,
K=4000 +0.20 L
K-0.20 L = 4000

10 K-2L=40,000 -() [Multiplying by10

L=2,000+0.25 K
-0.25 K+L 2,000
25 K+ 100 L =
200,000 -(i) [Multiplying by 100]
Multiplying equation (i) by 50 and add with equation (ii)
500K -100 L 2,000,000
25 K+100L= 200,000
475 K 22, 00,000
K 4,632
Substituting the value of K in equation ()
10 (4,632)-2L 40,000
2L 6,320
L3,160
Re-distribution summary
Particular B
Production department overlhead as
per 8,000 6,000
| distribution
Service departmernt overhead : K:35% 40% 1620
ofTk.4,632
,
1852
L:40%,40% of Tk.3160 1264 1264
10884 9116
161
Chapter- 5: Overhead
D.U. B.Com. 1990

month of
For the
departments.
S5-5: service
production
and two
has three follows:
Pubali Ltd. departmental
expenses
were as

1990 the 15,000

January,
B Tk. 28,000; C Tk.
departments:
A Tk. 24,000;
Production Tk. 12,000 basis as given
X Tk. 9,000 & Y percentage
departments: out o n a
Service are charged
service department
of E
The expenses
C |D 10%
below: |B
A 40%
30%
20%
20% 20%
20%
40% overheads to production
of
apportionment
the ultimate
to show
You are required
departments.
Service departments
Production departments
Solution: E
Particulars
C D
A B
9,000 12,000
Overhead as per primary 15,000
24,000 28,000 (9,000) 900
Distribution summary 3,600 2,700
Department-X
1,800
2,580 2,580 (12,900)
5,160 2,580 (2,580) 258
Department-Y
1,032 774
Department-X 516 52 51 (258)
103 52
5
Department-Y
10 21 15 (51)
Department-X 1 1 (5)
Department-Y 3
L 31,592 35,286 21,122
Department-X
S5-6:
in a
There are. two production departments and three service departments
manufacturing company. Total overhead of each department and the distribution of
Servicedepartments overhead in percentages are shown below:
Production Service

Total overhead
A P Q R
| Tk. 15,000 Tk. 10,000 Tk. 8,000 Tk. 10,000 Tk. 12,000|
Distribution of service departments overhead:
P 30% 30% 20% 20%
R
40% 30% 10% 20%
20% 40% 30% 10%
You are
auquired to show the distribution of _ervice department's
of the above mentioned overhead o n the basis
percentages under the simultaneous equation method.
Solution
According to the question,
P 8000+0.10Q+ 0.30 R
10P-O-3R &00 - 0 ) [ Multiplyirg by 19

Q 10,000 0. 20P+0.10 R
2P 10Q-R 100,O0- u){ Multiptying by 10)
R 12,000 0.20 P o.20Q 10
-2P-2Q+10 R 120,000- -(ii) [ Multiplying by
Deducting equatíon (ii) from (ií+)
-2P 2Q+R 120000
- 2P +10Q-10R 100,000

()
12Q+11 R 20,000 (iv)
and adding the result
to (1)
5
Multiplying equation (ii) by
-10P-10Q+50 R -600,000
Q -3R= 80000
10 P- -11Q+47 R=680,000- -(v) 12 and deducting
by 11 and (v) by
Multiplying equation (iv)
-132Q 121 R 220000
=

-132 Q+ 564 R 8,160,000

- 443 R= -7,940,000
. R = 17923

Multiplying R Value in equation (v)

11Q+47 (17,923) =680,000
11Q 680,000-842,381
1 1 Q= - 162,381

.Q14,762

Substituting the values of Qand R in equation (i)

10P-14,762 -3 (17,I23) 80,000
=

10P=80,000+ 14,762 + 53,769

' P 14853
tota
Production departments' total overhead after distribution of service departments
overhead will be as follows:
Chapter-5: Overhead 163
Particular Total
B
Production department overhead as per 15,000 10,000 25,000
distribution
Service department overhead 4456 4429 8,912
P (30%, 30%) of 14,853
Q(40%, 30%) of 14,762 5,905 4,429 10,334
R (20% , 40%) of 17,923 3,585 7,169 10,754
28,964 26,954 55,000
S5-7: BBA NU 2005
The estimated departmental factory overhead for Producing Departments S and T and
service
the estimated expenses of Service Departments E, F and G (before any
department allocations) are:

Producing Departments Service Departments

... Tk. 60,000 E... os. Tk. 20C00
" . T k 90,000 .. Tk. 20,000
G.. -Tk. 10000

Theinterdependence of the departments is as follows:

Service Departments
Departments
E F G
30% 40%
Producing--S 40% 30%
Producing--T 50%
Service -E 20%
Service-F 20%
ServiceG 30% 10%
20%
Marketing 10%
General Office
Required:
a. Calculate the final amount of estimated overhead of each service department
after reciprocal transfer costs have been calculated algebraically.
b. Compute the total factory overhead of each producing department and the
amount of Department G cost assigned to the Marketing department and to
General office.
Solution1
(a)
From the problem we got
E 20000+0.20F. -()
F 200000.20 E-. ---(ii)
G 10000 +0.30 E +0.10 F --(ii)
Substituting equation (ii) into equation (1)
E 20000+0.20 (20000+ 0.20 E)
E =20000+4000 +0.04 E
0.96 E = 24000

'.E 25000
Putting the value of E in equation (ii)
F 20000 +0.20 (25000)
' F = 25000

Putting the value of E and F in equation (ii)

G 10000 +0.30 (25000) +0.10 (25000)
G 10000+7500 + 2500
'.G 20000
(b) Marketing| General Service department
Particular Producing office
department department
E F G
Department S T
overhead before 20000 20000 10000
60000 90000
distribution of
service department
Department E 12500 (25000) 5000 7500
Department F 7500 10000 5000 (25000) 2500
Department G 8000 6000 4000 2000 (20000)
Total Z5500 118500 4000 2000 Nil Nil Nil

S5-8: BBA NU 2005

The Apex Company limited has four
production department and two service
departments. For the month of October 2006, the direct departmental overheads were as
follows:
Production departments: A Tk. 16,800; B Tk. 14,400; CTk. 7,200 and D Tk. 20,400.
Service departments: X Tk. 7,200; Y Tk.
5,400.
The expernses of service
departments are allocated as follows:
A B C |D X
X 30% Y
20% 25% 15%
Y 20% 30% 10%
10% 25% 15%
During the period total labor cost for the
A
production departments were as follows:
Wages (T.) 80,000
B C
D
70,000 35,000 1,00,000D
For product which passes through
a
all the four
materials cost of Tk 15,000 and wages for Tk. production departments having ra
product and sale price showing 20% profit on sales. 9,600. Find out the production cost o
Chapter - 5: Overhead 165
Solution
Particular Production department Service
department
Overhead as per primary A B D X
distribution 16800 14400 7200 20400 7200 400
Overhead distributed service 2160 1440 1800 1080 (7200) 720
department to production
departmecnt
X(30%,20%,25%,15%, 10%)
Y(20%,30%,10%,25%,15%) 1224 1836 612 1530 918 (6120)
X(30%,20%,25%,15%,10%) 275 184 229 138 (918) 92
Y(20%,30%,10%,25%,15%) 18 28 9 23 14 (92)
X(30%,20%,25%,15%,10%) 3 4 3 (14)
Total 204811|17891|9854|23174 L Nill Nill

on total laborlost X 100

Percentage of total factory overhead 285,000
25.05%
Calculation of production cost and sales profit of product:
Particular Tk.
15,000
Materials
Wages 9.600
Prime cost 24,600
Factory overhead 25.05% on wages i.e. (9600 x 25.05%) 2.405
Production cost 27,005
Profit 20% on sales/ 25% on cost 6,751
sellingprice 33,756
S5-9
A company has three production departments A, B, C and two service departments D and E. The
following figures are extracted from the record of the company:

Rent and rates . ...Tk. 5,000

General lighting... . 600
Indirect wages. **********i*oes**
1,500

rower. dp00
Depreciation of machinery..
*********mrpspeo 10,000
Sundries.. ********************** 10,000
The following further details are available:
A B C D E
Floor space (sq. m. 2,000 2,500 3,000 2,000 500
Light points 10 15 5
20 10
Direct wages (Tk.)_ 3,000 2,000 3,000 1,500 500
House power of machines 60 30 50 10
Value of machinery (Tk.) 60,000 80,0001,00,000 5,000 5,000
Working hours 6,226 4,028 4,066
166 Cost Accounting
allocated follows:
The expenses of D and E are
as

A B C D
30% 40% 10%
D 20%
EWhat 40% 20% 30% 10%
is the total cost if its raw material cost is Tk. 50, labor cost is Tk. 30 and it passes

A, B and C for 4, 5 and 3 hours respectively?

through Departments

Solution:
Overhead distribution sheet
Apportion base Total Production Service
Expenses
departmeent department
A B C D E
Floor space 5000 1000 1250 1500 1000 250
Rent& raes
(4:5:6:4:1)
600 100 150 200 100 50
General Light points
lighting (2:3:4:2:1)
1500 450 300 450 225 75
Direct wages
Indirect wages (6:4:6:3:1)
Horse power of 1500 600 300 500 100

Power machines (6:3:5:1)

Value of machinery 10000 2400 3200 4000 200 200
Depreciation (12:16:20:1:1)
of machinery Direct wages 10000 3000 2000 3000 1500 500
Sundries (6:4:6:3:1)
2000 1500 500
Direct wages
Total 30600 7550 7200 9650 4625 1575
Service dept D (20%, 30%A0%, 10%) 925 1388 1850 (4625) 462
Service dept E (40%, 20%,30%, 10%) 815 407 611 204 (2057)
Service dept D (20%, 30%,40%, 10%) 41 61 82 (204) 20
Service dept E (40%, 20%,30%, 10%) 8 5 7 (20)
30600 9339 9061 12200
Working hours 6226 4028 4066|
9339 9061 |12200|
6226 4028 4066
Overhead per hour =1.502.253.00
30600 2339 2061 |12200
Chapter5: Overhead 167

Statement showing cost of an article

Particular Tk.
Raw material 50
Labor 30
Overheads
Department A (4 x Tk. 1.50) 6.00 =

Department B(5 * Tk. 2.25) 11.25 =

Department C (3 x Tk. 3.00) 2.00 26.25

106.25
BBA NU 2012
S5-10:
information related to the activities of a production department of a
The following
factory for a certain periods:
Materials issued Tk. 36,000
Tk. 30,000
Direct wages
25,000
Direct labor hours worked
20,000
Hours of machine operation Tk. 25,000
Overheads chargeable to the department. amount to
No. 253 is Tk, 2000 and labor charges
If the cost of materials
consumed o n job overheads:
methods of allocating
cost by the following
Tk. 1,650 ascertain the works
1. Percentages of direct wages
Machine hour rate
2.
3 Direct labor hour rate hours of machine operated
Presume that labor hours worked for the job were 1,650 and
for the job were 1,200.
Solution:
Overheads on the LDepartment10
Department100
direct wages =erneads on
(1) Percentage on
Direct Wages
25,000 x 100 83
30,000
Overheads on the Department
(2) Machine hour rate
=

Hours of Machine Operation

Tk. 25,000=Tk. 1.25 per hour
20,000
Tk. 25,000
(3) Direct labor hour rate= Overheads on the Department 25,000
Labor Hours of Worked
=
Tk. 1.00 per hour
168 Cost Accounting
Comparative Statement Showing Works Cost of Job No. 253

Elements of Cost Amount (in Tk.)

Direct Machine Direct
Wages Hour Rate Labor
Cost Rate Hour Rate
2,000 2,000 2,000
Materials Consumed
Direct Wages 1,650 1,650 1,650
Prime Cost 3,650 3,650 3,650
Factory overheads:
1,375
1.83% of directwages(Tk. 1,650)
3
2. Tk. 1.25 per hour for 1,200 machine hours 1,500
3. Tk. 1.00 per hour for 1,650 labor hours 1,650
Works cost 5.025 5150 5,300
S5-11:
In an enterprise, factory overhead are charged to jobs on the basis of prime cost. From
January- 2009 the management decided to charge overheads on the basis of "direct labor
hours or "percentage of direct wages". The following figures are available in the
monthly accounts of the enterprise,
Manufacturing overhead Tk. 50,000, Direct wages Tk. 25,000; Direct labor hours 50,000.
Ina particular month, the following figures were available in regard to two jobs

Direct material
Job No.101 lob No.201
Tk. 150 Tk. 150
Direct wages
Tk. 20 Tk. 25
Direct labor hours
10 hours 8 hours
Prepare job cost sheet on the basis of direct wages
percentage and direct labor hour rate.
Solution
Job Cost Sheet
Details Direct wages % Latvor hour rate
No. 101 | No. 201
Direct materials No. 101 No. 201
Direct wages 150 150 150 150
Prime cost 20 25 20 25
Manufacturing Overhead 170 175 170 175
(200% direct wages; Tk. 1
of 40 50 10
per hour) 8
Manufacturing cost
210 225 180 183
Chapter-5. Overhead 169

S5-12:
apecification, On 1 December,
to customer s cast
A company manufactures goods
ordere
records show the following information in respect of three incomplete

Direct Direct Factory Direct

JobNo. labor hour
Materials| Labor overhead |
B-12 15,000 14,000 10,500 3,500
D-23 21,000 16,000 1500 500
E-07 29,000 21,000 18,000 60
Additional materials and labor
the next two months.
The jobs are completed during
hours required for completion of the jobs are as follows
JobNo. Direct Direct labor
Material | Hours
B-12 5,000 1,500
D-23 3,000 2000
E-07 4,000 3000
Calculate the cost of each
the basis of direct labor hours.
Factory overhead is charged
on

is20% on selling price.

job, assuming profit percentage
Solution
Job Cost Sheet
No. B-12 No. D-23 No. E-07
Details
(Tk) (Tk)_(Tk)
Direct materials 15,000 21,000 29,000
3,000 4,000
Add: Additional materials 5,000
Materials used 20.000 24000 33,000
Direct Labor2 20,000 22A00 31,500
40,000 46A00 64,500
Prime Cost
Factory overhead 15,000 21,000 27 000
Manufacturing cost 55,000 67400 91,500
Profit (20% on sale i.e. 25% oncost) 13,750 16850 22875
Selling Price 68,750 84.250 114.375

1. Calculate of labor hour rate:

aDirect labor 14,000
) JobNo.B-12 Tk. 4.00
Labor hours 3,500
JobNo.D-23-Direct labor 16,000 3.20
i)
Labor hours 5,000
(iii) Job No. E-07 Direct labor . 21,000Tk. 350o
Labor hours 6,000
170
Cost Accountlng
2. Caleulation of total direet labor cont:
( Job No. B-12 1,500
hoursTk.4 6,000
Total (14,000+6,000)-
'Tk. 20,000
(i) Job No. D-23 2,000 hours @ Tk. 3.20 6,400
Total (16,000+6,400) - "Tk. 22,400
(ii) Job No. B7 3,000 hours Tk. 3.5 10,500
Total (21,000+10,500) Tk. 31,500
3. Calculation of factory overhead rate:
(i) JobNo. B-12Factury overhead
10,500 Tk. 3.00
Labor hours 3,500

(i) JobNo. D-23- Factory overhnad 15,000 TK. 3.00

Labor hours 5,000

(iii) Job No. E-07- Factory overhead 18,000 Tk. 3.00

Labor hours 6,000

4. Calculation of total factory overhead:

Job No. B-12 1,500 hours Tk. 3 4,500
Total (10,500+4,500) Tk. 15,000
Job No. D-23 2,000 hours Tk. 3 - 6,000
(i)
Total (15,000+6,000) = Tk.21,000

ii) JobNo.E-07 3,000 hoursTk. 3= 9,000

Total (18,000+9,000) Tk. 27,000
S5-13:
Acme Ltd. uses two predetermined overhead rates for its products. Overhead are
divided on the basis of labor functions and machine operations and separate rates are
calculated for each of them. Some jobs are depended
others largely on machine
mainly on manual labor and some
operations. For the year ended 31t December, during the
year. The following estimates have been made:
Factory overhead for labor functions Tk. 204,000
Factory overhead for machine operations Tk. 198,000
Direct labor cost Tk. 240,000
Machine hours
36,000
Actual data relating to two jobs were as follows:
Direct material
Iob-104 Iob- 105
Tk. 23,100 Tk. 36,600
Direct labor Tk. 28,4000
Machine hours Tk. 2,400
200
3,000
Required:
a) Predetermined overhead rates
b) Costs of two jobs based on two overhead rates
Cost of the two jobs if a single overhead rate based on
direct labor cost was used.
171
Solution:
a. Predetermined overhead rates:
() Factory overhead rate on the basis of direct labor cost:
% of factory overhead rate = 204,000
x100 85%
240,000
(ii) Factory overhead rate on the basis of machine hours:
Factory overhead rate = 5.5
36.000

b. Required Cost of two jobs based on two overhead rates:

Statement of job cost
(Forjob No. 104)
Particulars Amount
(in Tk.)
Direct materials 23,100
Direct labor 28,400
Prime cost 51,500
Factory overhead
Labor functión 85% of 28,400 24,140
Machine (200x5.5) 1,100 25,240
Total
cost 76.740
Statement of job cost (For job No. 105)
Particulars Amount
(in Tk.)
Direct materials 36,600
Direct labor 2,400
Prime cost 39,000
Factory overhead
Labor function 85% of 2,400 2,040
Machine (3,000x5.5) 16500 18,540

Total cost 57.540

C. Calculation of single overhead rate based on direct labor cost:

%of factory overhead rate = 2.040001.98.000x100 167.50%
2.40.000
172 Cost Accounting

Statement of job cost

For two jobs in single overhead rate
Particulars
Direct materials Job No. 104 Job No. 105
Direct labor 23,100 36,600
Prime cost 28,400 2400
Factory overhead: (167.50% of direct labor) 51,500 39,000
Total cost 47,570 4,020
99.070 43,020