Marylebone Ltd operates an absorption costing system. The company has 2 production centres, Machining and Finishing,...

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Marylebone Ltd operates an absorption costing system. The company has 2 production centres, Machining and Finishing, together with 2 service departments. The following budgeted information is available: Total Machining Finishing Maintenance Canteen Indirect labour 408,000 144,000 168,000 60,000 36,000 Consumables 98,400 28,800 38,400 7,200 24,000 Electricity 48,000 Rent and rates 43,200 Depreciation 72,000 Supervision 57,600 Heating 28,800 756,000 The following budgeted information is also available: Total Machining Floor space (sq m) 90,000 Machinery cost () 900,000 30,000 450,000 Finishing 36,000 360,000 Maintenance Canteen 15,000 9,000 60,000 30,000 No. of employees 240 120 90 30 0 No. of kilowatt hours 30,000 13,500 12,000 3,000 1,500 You have ascertained that the most suitable basis of apportionment is listed below for the overhead costs shown: Electricity Rent and rates Depreciation Supervision Heating Kw hour consumed Floor space Machine cost Staff numbers Floor space Additional information: Budgeted hours are 18,960 machine hours for the machining department and 23,550 labour hours for the finishing department. The maintenance department provides 6,000 hours of service support to the machining department and 4,500 hours of service support to the finishing department. 3 Department of Accounting The company uses outside sub-contracted staff to operate the canteen. Required: (a) (b) (c) Prepare an overhead analysis sheet showing the allocation and apportionment of production overheads to the cost centres. Calculate the overhead absorption rate for the machining department using machine hours and the finishing department using labour hours. Calculate the overhead to be absorbed to a product, which is to be manufactured in the near future given that it takes 4 hours of machine time from the machining department and 2 hours of labour from the finishing department. Marylebone Ltd operates an absorption costing system. The company has 2 production centres, Machining and Finishing, together with 2 service departments. The following budgeted information is available: Total Machining Finishing Maintenance Canteen Indirect labour 408,000 144,000 168,000 60,000 36,000 Consumables 98,400 28,800 38,400 7,200 24,000 Electricity 48,000 Rent and rates 43,200 Depreciation 72,000 Supervision 57,600 Heating 28,800 756,000 The following budgeted information is also available: Total Machining Floor space (sq m) 90,000 Machinery cost () 900,000 30,000 450,000 Finishing 36,000 360,000 Maintenance Canteen 15,000 9,000 60,000 30,000 No. of employees 240 120 90 30 0 No. of kilowatt hours 30,000 13,500 12,000 3,000 1,500 You have ascertained that the most suitable basis of apportionment is listed below for the overhead costs shown: Electricity Rent and rates Depreciation Supervision Heating Kw hour consumed Floor space Machine cost Staff numbers Floor space Additional information: Budgeted hours are 18,960 machine hours for the machining department and 23,550 labour hours for the finishing department. The maintenance department provides 6,000 hours of service support to the machining department and 4,500 hours of service support to the finishing department. 3 Department of Accounting The company uses outside sub-contracted staff to operate the canteen. Required: (a) (b) (c) Prepare an overhead analysis sheet showing the allocation and apportionment of production overheads to the cost centres. Calculate the overhead absorption rate for the machining department using machine hours and the finishing department using labour hours. Calculate the overhead to be absorbed to a product, which is to be manufactured in the near future given that it takes 4 hours of machine time from the machining department and 2 hours of labour from the finishing department.

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Marylebone Ltd Overhead Analysis a Overhead Analysis Sheet Department Indirect Labour Consumables Electricity Rent Rates Depreciation Supervision Heat... View the full answer