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AL-BADRANI2008
Aug 15, 2008, 10:09 AM
ABC Ltd has overhead costs of $4, 00,000 in 2001. The machine hours are 1, 00,000 in the year 2001 and 50,000 in the year 2002. ABC chooses to use machine hours as their cost driver.

a) Calculate the pre determined overhead rate for 2001

b) Also calculate the amount of overhead cost to be applied to a production job in 2001 that requires 10 hrs of operation of the machine