Consider the following data pertaining to the production of a company for a particular month :

Opening stock of raw material 11,570
Closing stock of raw material 10,380
Purchase of raw material during the month 1,28,450
Total manufacturing cost charged to product 3,39,165
Factory overheads are applied at the rate of 45% of direct labour cost.
The amount of factory overheads applied to production is
A. 65,025
B. 94,287
C. 95,020
D. 1,52,624

7 Comments

Pia Ur Rehman on 01/02/2021 3:26 PM
Elaborate kindly
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- Warraich on 18/04/2021 5:44 AM
  Cost of Raw Material = Opening inventory-ending inventory
  11,570-10,380= 1,190
  Total Raw Materials Cost= 1,190+128,450= 129,640
  Manufacturing Cost (consists only direct labor & FOH only as material cost is separately given)= 339,165-129,640
  209,525
  As this amount is 145% because it includes 45% FOH an the other portion is Direct Labor so, = 209,525/145*45
  65,025
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