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Define Calculation for overhead absorption - Direct material cost percentage rate,Direct wage percentage rate,Prime cost percentage rate,Labour hour rate,Machine hour rate
a. Direct material cost percentage rate:
(Amount of overheads to be absorbed X 100) / (Direct Materials Cost)
b.Direct wage percentage rate
(Amount of overheads to be absorbed X 100) / (Direct Wages Cost)
c. Prime cost percentage rate
(Amount of overheads to be absorbed X 100) / (Prime Cost)
d. Labour hour rate
(Amount of overheads to be absorbed) / (Labour hours required for production)
e. Machine hour rate
(Amount of overheads to be absorbed) / (Number of machine hours)
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