Sherrel Joseph
CXC CAPE Advanced Level Accounting Unit 2
June 2008 Paper 2 Question 2a
Overhead Rate per Machine Hour
= Estimated Total Overhead Cost
Estimated Level of Activity
= $1800000 = $9 per machine hour
200000 machine hours
Total Cost of the Proposed Job (Traditional Job Order Costing)
$
Direct Material 16000
Direct Labour 24000
Manufacturing Overhead (Machine Hours)
- 4000 hours x $9 36000
Total Cost 76000
Activity Cost Driver Rate
= Estimated Cost of Activity
Total Capacity for Activity Driver
1. Machining = $880000 = $4.40 per machine hour
200000
2. Setup Equipment = $120000 = $400 per setup
300
3. Engineering = $440000 = $22 per engineering hour
20000
4. Inspecting = $360000 = $30 per inspection
12000
CXC CAPE Advanced Level Accounting Unit 2
June 2008 Paper 2 Question 2a
Overhead Rate per Machine Hour
= Estimated Total Overhead Cost
Estimated Level of Activity
= $1800000 = $9 per machine hour
200000 machine hours
Total Cost of the Proposed Job (Traditional Job Order Costing)
$
Direct Material 16000
Direct Labour 24000
Manufacturing Overhead (Machine Hours)
- 4000 hours x $9 36000
Total Cost 76000
Activity Cost Driver Rate
= Estimated Cost of Activity
Total Capacity for Activity Driver
1. Machining = $880000 = $4.40 per machine hour
200000
2. Setup Equipment = $120000 = $400 per setup
300
3. Engineering = $440000 = $22 per engineering hour
20000
4. Inspecting = $360000 = $30 per inspection
12000
