BU247 Lecture Notes - Deutsche Luft Hansa, Cost Driver
Document Summary
3-29 mackenzie consulting computes the cost of each consulting engagement by adding a portion of firm wide overhead costs to the labour cost of the consultants on the engagement. The overhead costs are assigned to each consulting engagement using a cost driver rate based on consultant labour costs. Direct labour + overhead (2x direct labour cost) = 000 + 2 x 000 = 000. 3-30 the brinker company uses a job order costing system at its local plant. The plant has a machining department and a finishing department. The company uses machine hours to allocate machining department overhead costs to jobs and uses direct labour cost to allocate finishing department costs to jobs. Cost and practical capacity estimates for the current year are as follows: 000/ 350 000= 80% of dl cost. Required: determine the cost driver rate for each department, cost records for job 101 show the following:
