All Leaving Cert Accounting posts
  • avatar image

    Costing LiamoDuggan

    When asked to calculate a suitable overhead absorption rate for each department, how do you choose between labour hours and machine hours? For example:

    Department: Processing

    Overhead: €634'000

    Labour hours: 80'000

    Machine hours: 40'000

    What do I do?

    1. avatar image

      niamh 070597

      You pick whichever has the most hours, so in your question it would be labour hours

    2. avatar image


      In the 2009 question, labour hours turned out to be higher for all three industries. In the marking scheme, the machine hours were used to calculate the o/h rate for processing even though they were less than labour hours. Why is this?

    3. avatar image


      You always do the production department on the basis of machine hours regardless of which has the more hours

    4. avatar image


      Share files from your computer