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Homework Answers
| (i) | Statement Showing the Apportionment of Overheads | |||||||
| Items of Overheads | Basis of Apportionment | Total | Production Department | Service Department | ||||
| Cutting | Machining | Pressing | Stores | Maintenance | ||||
| Rent & Taxes [60:25:6:5:4] | Floor Area Occupied (Sq.Ft) | £15,000 | 9,000 | 3,750 | 900 | 750 | 600 | |
| [15,000 x 60/100] | [15,000 x 25/100] | [15,000 x 6/100] | [15,000 x 5/100] | [15,000 x 4/100] | ||||
| Machine Insurance [20:8:7:4:1] | Machine Value | £10,000 | 5,000 | 2,000 | 1,750 | 1,000 | 250 | |
| [10,000 x 20/40] | [10,000 x 8/40] | [10,000 x 7/40] | [10,000 x 4/40] | [10,000 x 1/40] | ||||
| Telephone Charges [60:25:6:5:4] | Floor Area Occupied (Sq.Ft) | £5,000 | 3,000 | 1,250 | 300 | 250 | 200 | |
| [5,000 x 60/100] | [5,000 x 25/100] | [5,000 x 6/100] | [5,000 x 5/100] | [5,000 x 4/100] | ||||
| Depreciation [3:6:5:2:4] | Machine Value | £20,000 | 10,000 | 4,000 | 3,500 | 2,000 | 500 | |
| [20,000 x 20/40] | [20,000 x 8/40] | [20,000 x 7/40] | [20,000 x 4/40] | [20,000 x 1/40] | ||||
| Production Supervisor Salary [1:2:1] | Direct Labour Hours | £25,000 | 6,250 | 12,500 | 6,250 | - | - | |
| [25,000 x 1/4] | [25,000 x 2/4] | [25,000 x 1/4] | ||||||
| Heating / Lighting [60:25:6:5:4] | Floor Area Occupied (Sq.Ft) | £10,000 | 6,000 | 2,500 | 600 | 500 | 400 | |
| [10,000 x 60/100] | [10,000 x 25/100] | [10,000 x 6/100] | [10,000 x 5/100] | [10,000 x 4/100] | ||||
| Total Costs | £85,000 | £39,250 | £26,000 | £13,300 | £4,500 | £1,950 | ||
| Overheads Distribution Statement | ||||||||
| Items of Overheads | Total | Production Department | Service Department | |||||
| Cutting | Machining | Pressing | Stores | Maintenance | ||||
| Overheads as per Primary Distribution | £85,000 | £39,250 | £26,000 | £13,300 | £4,500 | £1,950 | ||
| Allocated Overheads Specific to each department | £8,000 | £3,000 | £2,000 | £1,500 | £1,000 | £500 | ||
| Total Overhead Allocated | £93,000 | £42,250 | £28,000 | £14,800 | £5,500 | £2,450 | ||
| Cost of Stores apportioned in the ratio (5:3:2) | £0.00 | £2,750 | £1,650 | £1,100 | -£5,500 | - | ||
| [5,500 x 5/10] | [5,500 x 3/10] | [5,500 x 2/10] | ||||||
| Cost of Maintenance apportioned in the ratio (3:2:5) | £0.00 | £735 | £490 | £1,225 | -£2,450 | |||
| [2,450 x 3/10] | [2,450 x 2/10] | [2,450 x 5/10] | ||||||
| Total OH Costs | £93,000 | £45,735 | £30,140 | £17,125 | £0 | £0 | ||
| DETERMINE THE OVERHEAD RATE BASED ON DIRECT LABOUR HOURS | ||||||||
| PARTICULARS | AMOUNT | BASIS | DL HOURS | OH RATE | ||||
| [A] | [B] | [C] | [D] = {A/C} | |||||
| OVERHEAD COST | £93,000 | Direct Labour Hours | 4,000 | £23.25 | ||||
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