Colours Ltd has three production departments (Blue, Red and Green) and one servicedepartment in its factory. A predetermined overhead absorption rate has beenestablished for each of the production departments on the basis of machine hours atnormal capacity. The overheads of each production department comprise directlyallocated expenses and a share of the overheads of the service department,apportioned in the ratio 2:1:2 to departments Blue, Red and Green respectively. Alloverheads are classified as fixed in nature. The actual overhead incurred in eachdepartment was in line with the budget (i.e. there was no variance).The following table of incomplete information is available concerning the apportionmentand absorption of production overheads for a period.Production departmentsBlue Red GreenBudgeted allocated expenses (ZMW) 125 649.25 152 316.45 159 326.15Budgeted service department apportionment A B 249 653.10Total Overheads per department C D ENormal machine hours capacity 4 952 hours F GPredetermined absorption rate (ZMW/machine hour) H 36.95 IActual machine utilisation J 6 943 hours 7 069 hoursOver/(under) absorption of overheads(ZMW) (68135.21) K (47592.72)Required:Calculate the missing figures for values A to K
Colours Ltd has three production departments (Blue, Red and Green) and one service
department in its factory. A predetermined overhead absorption rate has been
established for each of the production departments on the basis of machine hours at
normal capacity. The
allocated expenses and a share of the overheads of the service department,
apportioned in the ratio 2:1:2 to departments Blue, Red and Green respectively. All
overheads are classified as fixed in nature. The actual overhead incurred in each
department was in line with the budget (i.e. there was no variance).
The following table of incomplete information is available concerning the apportionment
and absorption of production overheads for a period.
Production departments
Blue Red Green
Budgeted allocated expenses (ZMW) 125 649.25 152 316.45 159 326.15
Budgeted service department apportionment A B 249 653.10
Total Overheads per department C D E
Normal machine hours capacity 4 952 hours F G
Predetermined absorption rate (ZMW/machine hour) H 36.95 I
Actual machine utilisation J 6 943 hours 7 069 hours
Over/(under) absorption of overheads(ZMW) (68135.21) K (47592.72)
Required:
Calculate the missing figures for values A to K
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