A fabrication concern had a factory overhead of rs 4000 and direct labor cost of rs 12000. find the percentage overhead using percentage of direct labor cost method. if for the production of a particular order, z had a direct labor cost of rs. 60. find the overhead cost for the production order.
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This method makes use of the cost of direct labour charged to a particular product as a basis for setting the overhead rate for the product.
% of direct labour cost=% of overhead (on cost)
= Factory overhead for budget period/Direct labour cost for budget period x 100… (1)
% of direct labour cost=% of overhead (on cost)
= Factory overhead for budget period/Direct labour cost for budget period x 100… (1)
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