Figure 5 Peach, Inc

question 68

Multiple Choice

Figure 5 Peach, Inc., has identified the following overhead costs and cost drivers for next year:
The following are two of the jobs completed during the year:
The company's normal activity is 4,000 direct labour hours.
Refer to Figure 5. If Peach, Inc., used direct labour hours to assign overhead, the unit cost for Job 401 would be

• A) £117.50
• B) £111.88
• C) £105.00
• D) £102.50

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Definitions:

Equivalent Units

A concept used in process costing that converts partially completed units into a number of equivalent full units.

Materials

The raw inputs used in the production of goods, often categorized into direct materials that can be directly traced to the final product and indirect materials used in the production process but not directly identifiable with specific units or batches of production.

Equivalent Units

A concept in cost accounting used to allocate costs to units of production in processes where the units are not yet complete, converting them into the amount of finished goods units.

Assembly Department

A section within a manufacturing process where components are joined together to form a finished product.