KOKO LTD operates five departments of which Department 1, 2 & 3 are production departments and...
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KOKO LTD operates five departments of which Department 1, 2 & 3 are production departments and Departments 4 and 5 being stores and maintenance departments respectively. The actual cost incurred for the year ended 31 st December 2019 were: GHS Rent 820,000 340,000 540,000 210,000 Insurance of Building Power Supervision Machine Depreciation Light and Heat 440,000 500,000 DEPARTMENTS Finishing Stores Machining 200,000 Assembling Maintenance Indirect Material s Indirect Wages 150,000 240,000 60,000 100,000 350,000 500,000 620,000 160,000 200,000 The following information is also available for the 5 departments. DEPARTMENTS Machining Assembling Finishing Stores Mainten ance Area Occupied (sq.ft) Cost of machines (GHS) 600 300 150 60 90 120000 80000 40000 10000 Horse Power 500 350 1500 400 250 No. of Mat Requisition 55 80 25 Maintenance Hours 400 560 40 Direct Labour Hours 75000 300,000 48,000 18,000 9,000 Machine Working Hours 380,000 101,000 280,000 15,000 The company produces two products KB and KT, and the number of hours spent on the production of each unit of KB and GH are: KB KT Machining: Direct Labour Hours Machine Hours Assembling: Direct Labour Hours 105 50 200 180 200 155 Machine Hours 55 40 Finishing: Direct Labour Hours Machine Hours 60 80 205 156 Required: a. Prepare the overheads analysis sheet showing the apportionment of overheads to the department and the re-distribution of the service departments overhead to the production departments. b. Calculate for each production department the most appropriate overhead absorption rate given reasons for your choices. c. Calculate the overheads chargeable to each unit of the products KB and KT produced. (14 marks) (3 marks) KOKO LTD operates five departments of which Department 1, 2 & 3 are production departments and Departments 4 and 5 being stores and maintenance departments respectively. The actual cost incurred for the year ended 31 st December 2019 were: GHS Rent 820,000 340,000 540,000 210,000 Insurance of Building Power Supervision Machine Depreciation Light and Heat 440,000 500,000 DEPARTMENTS Finishing Stores Machining 200,000 Assembling Maintenance Indirect Material s Indirect Wages 150,000 240,000 60,000 100,000 350,000 500,000 620,000 160,000 200,000 The following information is also available for the 5 departments. DEPARTMENTS Machining Assembling Finishing Stores Mainten ance Area Occupied (sq.ft) Cost of machines (GHS) 600 300 150 60 90 120000 80000 40000 10000 Horse Power 500 350 1500 400 250 No. of Mat Requisition 55 80 25 Maintenance Hours 400 560 40 Direct Labour Hours 75000 300,000 48,000 18,000 9,000 Machine Working Hours 380,000 101,000 280,000 15,000 The company produces two products KB and KT, and the number of hours spent on the production of each unit of KB and GH are: KB KT Machining: Direct Labour Hours Machine Hours Assembling: Direct Labour Hours 105 50 200 180 200 155 Machine Hours 55 40 Finishing: Direct Labour Hours Machine Hours 60 80 205 156 Required: a. Prepare the overheads analysis sheet showing the apportionment of overheads to the department and the re-distribution of the service departments overhead to the production departments. b. Calculate for each production department the most appropriate overhead absorption rate given reasons for your choices. c. Calculate the overheads chargeable to each unit of the products KB and KT produced. (14 marks) (3 marks)
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Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant
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