Overhead recovery rate ..
topcat
Trusted RegularRegistered Posts: 452
Hello,
"the budget production of 15,000 units of A plus 5000 units of B will require 4000 machine hours and 1050 direct labour hours"
Over head recovery should be based on:
units of output
Labour Hours
Machine hours
The answer is machine hours
Just wondering why not units as there is more of them ?
"the budget production of 15,000 units of A plus 5000 units of B will require 4000 machine hours and 1050 direct labour hours"
Over head recovery should be based on:
units of output
Labour Hours
Machine hours
The answer is machine hours
Just wondering why not units as there is more of them ?
0
Comments

I am speculating it is because the AATgenerally examine based on the two commonlyused measures which are total numbers of direct labour hours and total numbers of machine hours for absorption rate calculations.0