(a) (b) Prepare an overhead analysis sheet, which clearly shows how the above costs would be apportioned to each department The canteen is a production-related cost because it is used to provide meals to the workforce. It is known as a service department. However, units being produced spend time only in the preparation and assembly departments. Therefore, to account for canteen costs they must be re-apportioned into the preparation and assembly departments (secondary apportionment). As a continuation of the overhead analysis sheet prepared in part (a), provide details of the reapportion of canteen costs into the preparation and assembly departments?

(a) (b) Prepare an overhead analysis sheet, which clearly shows how the above costs would be apportioned to each department The canteen is a production-related cost because it is used to provide meals to the workforce. It is known as a service department. However, units being produced spend time only in the preparation and assembly departments. Therefore, to account for canteen costs they must be re-apportioned into the preparation and assembly departments (secondary apportionment). As a continuation of the overhead analysis sheet prepared in part (a), provide details of the reapportion of canteen costs into the preparation and assembly departments?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

See similar textbooks

Similar questions

What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials, $17,000; direct labor, $33,000; and manufacturing overhead, $70,000? A. $16,000 B. $50,000 C. $103,000 D. $120000
Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)
York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
The following information is available for a company. How much rent and rate costs should be apportioned to Department Z? Rent and rate costs 15,000 Bases of apportionment Departments x floor area (square metres) 2000 Machine utilisation (%) 60 No. of employees 100 department y floor area (square metres) 2000 Machine utilisation (%) 10 No. of employees. 200 department z floor area (square metres) 2000 Machine utilisation (%) 30 No. of employees. 300 A. £7,500 B £6,000 C. £3,000 D. £4,500
The following information is available for a company. How much of the factory rent should be charged to Department S? Factory rent = £15,000 Departments R S T 1,250 2,500 1,250 30 40 30 200 200 200 Bases of apportionment Floor area (square metres) Machine utilisation (%) No. of employees a) £7,500 b) £3,750 c) £5,000 d) £6,000
A manufacturing company is about to start manufacturing a new product, the FX200 The management accountant has provided the following information about the unit cost of the FX200: Direct labour (3 hours @R10/hr) Indirect labour (2 hours @R9/hr) Direct material (4 kg @R5/kg) Indirect material R10 Direct expenses R4 Indirect production expenses R7 Selling and distribution overhead R5 For one unit of FX200, calculate the following: a).The prime cost b).The total production cost c).The full cost
Heron Ltd has two Production Departments 1 and 2 and two ancillary Service Departments X and Y.The following are the expected overhead costs for the next 6 months:Overhead Total€Depreciation of equipment 20,000Depreciation of factory buildings 24,000Factory heating 8,000Factory cleaning 4,000Factory canteen 5,400The following information relates to the Production and Service Departments of the Factory:Production ServiceDept. 1 Dept. 2 Dept. X Dept. YVolume in cubic metres 1,000 2,000 600 400Floor area in square metres 800 600 400 200Number of employees 140 100 70 50Book value of equipment €10,000 €15,000 €9,000 €6,000Machine hours 4,000 1,000You are required to:(i) Calculate the overhead to be absorbed by each Department stating clearly the basis ofapportionment used.(ii) Transfer the Service Department costs to Production Departments 1 and 2 on the basis ofmachine hours.(iii) Calculate a machine hour overhead absorption rate for Departments 1 and 2.(iv) Explain why it is necessary to…
Mvete Limited is an established company in the manufacturing industry. The company is manufacturing a very successful product, namely Vete12. The following cost structure is given to you, the newly appointed Trainee Cost Accountant, to advise management on the different levels of production: At the current level of 15 000 units produced and sold:Direct material R20 per unit Direct labour R375 000Indirect material R5 per unit Indirect labour (includes the production supervisors’ salary of R240 000. The remainder is R5.50 per unit R352 500 Other manufacturing overheads (all variable) R12.50 per unit Depreciation charge PPE (production plant and machinery) R375 000Selling and administrative expenses: • Variable selling expenses R10.25 per unit• Fixed selling expenses R5 per unit • Administrative expenses (all fixed) R7 per unit b) Why is there a difference in the unit cost? Discuss briefly c) Assume the company produces and sell 20 000 units, and wishes to make a net profit of R10 per…
Mvete Limited is an established company in the manufacturing industry. The company is manufacturing a very successful product, namely Vete12. The following cost structure is given to you, the newly appointed Trainee Cost Accountant, to advise management on the different levels of production: At the current level of 15 000 units produced and sold:Direct material R20 per unit Direct labour R375 000Indirect material R5 per unit Indirect labour (includes the production supervisors’ salary of R240 000. The remainder is R5.50 per unit R352 500 Other manufacturing overheads (all variable) R12.50 per unit Depreciation charge PPE (production plant and machinery) R375 000Selling and administrative expenses: • Variable selling expenses R10.25 per unit• Fixed selling expenses R5 per unit • Administrative expenses (all fixed) R7 per unit Required b) Why is there a difference in the unit cost? Discuss briefly c) Assume the company produces and sell 20 000 units, and wishes to make a net profit of…
Mvete Limited is an established company in the manufacturing industry. The company is manufacturing a very successful product, namely Vete12. The following cost structure is given to you, the newly appointed Trainee Cost Accountant, to advise management on the different levels of production: At the current level of 15 000 units produced and sold:Direct material R20 per unit Direct labour R375 000Indirect material R5 per unit Indirect labour (includes the production supervisors’ salary of R240 000. The remainder is R5.50 per unit R352 500 Other manufacturing overheads (all variable) R12.50 per unit Depreciation charge PPE (production plant and machinery) R375 000Selling and administrative expenses: • Variable selling expenses R10.25 per unit• Fixed selling expenses R5 per unit • Administrative expenses (all fixed) R7 per unit Required a) Calculate at the three 3 different production levels of: • 15 000 units (current level of production)• 20 000 units,• 12 000 units i. The variable…