Exhibit 1: GreatWell Company Ltd is a factory that produces articles in India. Its total budgeted overheads is given as $240,000. The production budget for the month of May is as follows: Product A B i) Units 20,000 10,000 ii) Labour hours 20,000 20,000 iii) Labour cost $17,500 $22,500 iv) Machine hours 45,000 15,000 v) Material cost $15,000 $25,000 You are required to calculate the overhead absorption rater per unit of A and B using the following methods: a) Unit method b) Percentage on material cost. c) Percentage on labour cost. d) Percentage On prime cost. e) Labour hour rate. f) Machine hour rate.
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