QUESTION 4PTS Ltd is a manufacturing company which uses three production and three service departmentsto make its products. It has the following overhead costs from primary distribution.Production Departments:Mixing $234,980Assembly $345,900Finishing $134,525Service Departments:Stores $120,354Accounts $238,970Canteen $ 89,700Other overhead costs which are yet to be distributed are as follows:$12,685,500$ 3,450,900$ 985,350$ 2,890,600$ 600,000$ 256,000The basis of apportioning the overheard cost is given as follows:Factory rentBusiness ratesHeat and lightingMachinery powerDepreciationCanteen subsidyMixAssFinStorAcctCanNumber of employeesFloor area occupied (m sq) 1,800 1,400 8005060186.12241000400600Horse power of machineValue of machine ($'000)13,000 5006,500 20010040025030120502030Overheads allocated to service departments are redistributed to the production departments asfollows:МixAssFinStores50%30%20%Accounts15%25%60%Canteen25%55%20%Labour hours (000)Machine hours (000)100140352003690Required:A. Prepare overhead analysis sheet to determine the total overhead allocated to productiondepartments.NB: Round all figures up to the nearest whole number.B. Calculate the overhead absorption rates using an appropriate baseC. Assuming PTS manufactures two products: Mang and Banny.Mang has a direct cost of $100. It's manufacturing process uses 10 hours in Mixing, 10 hours inAssembly and 2 hours in finishing department. Banny has a direct cost of $200 and each unitrequires 10 hours in Mixing, 20 hours in Assembly and 20 hours in Finishing. Calculate themanufacturing costs assigned to each unit of product.

The OH costs of service departments are usually allocated to the production department.

QUESTION 4 PTS Ltd is a manufacturing company which uses three production and three service departments to make its products. It has the following overhead costs from primary distribution. Production Departments: Mixing $234,980 Assembly $345,900 Finishing $134,525 Service Departments: Stores $120,354 Accounts $238,970 Canteen $ 89,700 Other overhead costs which are yet to be distributed are as follows: $12,685,500 $ 3,450,900 $ 985,350 $ 2,890,600 $ 600,000 $ 256,000 The basis of apportioning the overheard cost is given as follows: Factory rent Business rates Heat and lighting Machinery power Depreciation Canteen subsidy Mix Ass Fin Stor Acct Can Number of employees 50 60 18 6. 12 24 Floor area occupied (m sq) 1,800 1,400 800 1000 400 600 Horse power of machine Value of machine ($'000) Overheads allocated to service departments are redistributed to the production departments as 13,000 500 6,500 200 100 400 250 30 120 50 20 30 follows: Мix Ass Fin Stores 50% 30% 20% Accounts 15% 25% 60% Canteen 25% 55% 20% Labour hours (000) Machine hours (000) Required: A. Prepare overhead analysis sheet to determine the total overhead allocated to production departments. NB: Round all figures up to the nearest whole number. 100 140 35 200 36 90 B. Calculate the overhead absorption rates using an appropriate base C. Assuming PTS manufactures two products: Mang and Banny. Mang has Assembly and 2 hours in finishing department. Banny has a direct cost of $200 and each unit direct cost of $100. It's ma uring process uses 10 hours ixing, 10 hours in requires 10 hours in Mixing, 20 hours in Assembly and 20 hours in Finishing. Calculate the manufacturing costs assigned to each unit of product.

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter10: Accounting Systems For Manufacturing Operations

Section: Chapter Questions

Problem 10.4.3C: Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost...