Answered: Top Vent Manufacturing Inc. consists of…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...

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Question

Top Vent Manufacturing Inc. consists of two production departments (Assembly and
Machining) and two service departments (Maintenance and Store). The estimated overhead
costs and other relevant information for the respective departments are as follows:
Assembly
Machining
Maintenance
Store
Estimated overhead
costs
$95,000
$82,000
$46,000
$30,000
Direct labour hours
Machine hours
10,000
2,000
5,000
30,000
It has been estimated that each service department does work for other cost centres in the
following proportions:
Total labour hours used by departments
Assembly
Machining
Maintenance
Store
Maintenance to
Store to
50%
60%
50%
30%
10%
Required:
(Show all workings clearly and round all solutions to 2 decimal places)
(a) Calculate the total overhead costs for the Machining and Assembly departments after
the re-apportionment of the costs from the service departments.
(b)
Calculate the department overhead rates for the Machining and Assembly
departments using the appropriate bases.

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Finest vent Industial Inc. consists of two production departments (Assembly and Machining) and two service departments (Maintenance and Store). The estimated overhead costs and other relevant information for the respective departments are as follows: Assembly Machining Maintenance Store Estimated overhead costs $95,000 $82,000 $46,000 $30,000 Direct labour hours Machine hours 10,000 2,000 5,000 30,000 It has been estimated that each service department does work for other cost centres in the following proportions: Total labour hours used by departments Assembly Machining Maintenance Store Maintenance to Store to 50% 60% 50% 30% 10% Required: (Show all workings clearly and round all solutions to 2 decimal places) (a) Calculate the total overhead costs for the Machining and Assembly departments after the re-apportionment of the costs from the service departments. (b) Calculate the department overhead rates for the Machining and Assembly departments using the appropriate bases.

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