Vision Manufacturing Limited manufactures Airport Trolleys. It has a factory that has two divisions viz. Fabrication and Assembly. It also has two service departments viz Stores and Maintenance. Amount in Rs. Allocated Overhead Costs Fabrication Department 15,52,000 Assembly Department 7,44,000 Stores 2,36,000 Maintenance Department 1,96,000 Other Overheads Factory Rent 15,28,000 Factory Building Insurance 1,72,000 Plant and Machinery Depreciation 2,65,000 Subsidy for Staff Canteen 4,48,000 Direct Costs Amount in Rs. Fabrication Department 63,26,000 Material 8,62,000 Labour Assembly Department Material 1,42,000 Labour 13,06,000 The company provides the following additional Information: Particulars Fabrication Department Assembly Department Stores Department Maintenance Department Floor Area in Square meters 24,000 10,000 2,500 3,500 Value of Plant, Machinery& Tools (Rs.) 16,50,000 7,50,000 75,000 1,75,000 No of Stores Requisitions 3,600 1,400 -- --- Maintenance hours required 2,800 2,300 400 -- No. of Employees 120 80 38 12 Machine Hours 30,00,000 60,000 -- -- Labour Hours 70,000 26,00,000 QUESTIONS : (a) Prepare a table showing the distribution of Overhead Cost of the two service departments to the two Production departments using Step method (b) Calculate the most appropriate overhead recovery rate of each department
Vision Manufacturing Limited manufactures Airport Trolleys. It has a factory that has two divisions viz. Fabrication and Assembly.
It also has two service departments viz Stores and Maintenance.
|
|
Amount in Rs. |
|
Allocated Overhead Costs |
|
|
Fabrication Department |
15,52,000 |
|
Assembly Department |
7,44,000 |
|
Stores |
2,36,000 |
|
Maintenance Department |
1,96,000 |
|
Other |
|
|
Factory Rent |
15,28,000 |
|
Factory Building Insurance |
1,72,000 |
|
Plant and Machinery |
2,65,000 |
|
Subsidy for Staff Canteen |
4,48,000 |
|
|
Direct Costs |
Amount in Rs. |
|
|
Fabrication Department |
63,26,000 |
|
|
Material |
8,62,000 |
|
|
Labour |
|
|
|
Assembly Department |
|
|
|
Material |
1,42,000 |
|
|
Labour |
13,06,000 |
The company provides the following additional Information:
|
Particulars |
Fabrication Department |
Assembly Department |
Stores Department |
Maintenance Department |
|
Floor Area in Square meters |
24,000 |
10,000 |
2,500 |
3,500 |
|
Value of Plant, Machinery& Tools (Rs.) |
16,50,000 |
7,50,000 |
75,000 |
1,75,000 |
|
No of Stores Requisitions |
3,600 |
1,400 |
-- |
--- |
|
Maintenance hours required |
2,800 |
2,300 |
400 |
-- |
|
No. of Employees |
120 |
80 |
38 |
12 |
|
Machine Hours |
30,00,000 |
60,000 |
-- |
-- |
|
Labour Hours |
70,000 |
26,00,000 |
|
|
QUESTIONS :
(a) Prepare a table showing the distribution of Overhead Cost of the two service departments to the two Production departments using Step method
(b) Calculate the most appropriate overhead recovery rate of each department.
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