A factory in Ndola process turkeys for sale. The production process is classified into four cost...

Transcribed Image Text:

A factory in Ndola process turkeys for sale. The production process is classified into four cost centres and the relevant forecast information for each of the cost centres and the relevant forecast information for each of the cost centres is as follows: Indirect Labour Consumables Heating and Lighting Rent and rates Depreciation Supervision Power Kilowatt hours Direct materials (K) Direct labour (k) Maintenance hours Labour hours Total Machine hours K REQUIRED: 340,000 82,000 24,000 The following information is also available: 36,000 60,000 Floor space (sq metres) Book value of machinery (K) 600,000 Number of employees 48,000 40,000 630,000 Total 60,000 160 20,000 Cutting K 120,000 24,000 Cutting 20,000 300,000 80 9,000 100,000 50,000 8,000 12,640 Cooking K 140,000 32,000 24,000 240,000 60 Cooking Canteen 8,000 50,000 42,000 6,000 8,400 Canteen 15,700 K 30,000 20,000 6,000 20,000 10 1,000 Maintenance K 50,000 6,000 Maintenance 10,000 40,000 10 2,000 (a) An overhead cost statement which clearly shows basis of apportionment. (b) The labour hour overhead absorption rare for the Cutting Department and machine hour overhead rate for the Cooking Department. (c) How many alternative methods of overhead absorption might be used in this situation? What are the benefits and limitations with regard to using these rates at the company? The actual overhead figures year were: Cutting Department k310,000; 12,000 labour hours. Cooking Department: K312,000; 15,810 machine hours. What is the under/over-absorption for each department? A factory in Ndola process turkeys for sale. The production process is classified into four cost centres and the relevant forecast information for each of the cost centres and the relevant forecast information for each of the cost centres is as follows: Indirect Labour Consumables Heating and Lighting Rent and rates Depreciation Supervision Power Kilowatt hours Direct materials (K) Direct labour (k) Maintenance hours Labour hours Total Machine hours K REQUIRED: 340,000 82,000 24,000 The following information is also available: 36,000 60,000 Floor space (sq metres) Book value of machinery (K) 600,000 Number of employees 48,000 40,000 630,000 Total 60,000 160 20,000 Cutting K 120,000 24,000 Cutting 20,000 300,000 80 9,000 100,000 50,000 8,000 12,640 Cooking K 140,000 32,000 24,000 240,000 60 Cooking Canteen 8,000 50,000 42,000 6,000 8,400 Canteen 15,700 K 30,000 20,000 6,000 20,000 10 1,000 Maintenance K 50,000 6,000 Maintenance 10,000 40,000 10 2,000 (a) An overhead cost statement which clearly shows basis of apportionment. (b) The labour hour overhead absorption rare for the Cutting Department and machine hour overhead rate for the Cooking Department. (c) How many alternative methods of overhead absorption might be used in this situation? What are the benefits and limitations with regard to using these rates at the company? The actual overhead figures year were: Cutting Department k310,000; 12,000 labour hours. Cooking Department: K312,000; 15,810 machine hours. What is the under/over-absorption for each department?