Question 3 30 Marks Chineke Ltd has two production cost centers: Assembly and Cutting, and one...

   

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Question 3 30 Marks Chineke Ltd has two production cost centers: Assembly and Cutting, and one service cost center Human resources. The following budgeted information was supplied for the next financial period: Budgeted overhead item Cost Additional information: Departments Human resour Assembly Cutting Human resources Assembly Cutting Building repairs N$60 000 Numbers Estimated of labour employees 20 50 140 Other allocated overheads: Departments Actual overheads Actual machine hours hours 2000 1760 2 240 Cafeteria cost N$18 200 N$20 000 N$24 300 N$44 000 Cubic capacity 1000 1 500 4400 Indirect materials Factory lighting N$130 000 Estimated machine hours 1.000 4.000 5.000 Depreciation N$6 000 N$6 000 N$6 000 Cutting N$ 202 200 7.000 Value of Buildings N$ You were further provided with the following actual overheads for the department: Assembly N$ 95 500 6 000 Maintenance of machine N$48 000 200 000 100 000 250 000 Estimated labour cost N$ 5.000 2.000 3.000 Required: (a) Prepare an overhead worksheet analysis showing the allocation of all overheads incurred by Chineke Ltd. (21 marks) (b) Re-apportion the human resource overheads to production department using the appropriate basis. (2 marks) (c) Calculate the overhead absorption rate (POR) for each department in Chineke using the machine hour. (2 marks) (d) Calculate the under-or-over absorption cost for each department (Assembly and (5 marks) Cutting). Question 3 30 Marks Chineke Ltd has two production cost centers: Assembly and Cutting, and one service cost center Human resources. The following budgeted information was supplied for the next financial period: Budgeted overhead item Cost Additional information: Departments Human resour Assembly Cutting Human resources Assembly Cutting Building repairs N$60 000 Numbers Estimated of labour employees 20 50 140 Other allocated overheads: Departments Actual overheads Actual machine hours hours 2000 1760 2 240 Cafeteria cost N$18 200 N$20 000 N$24 300 N$44 000 Cubic capacity 1000 1 500 4400 Indirect materials Factory lighting N$130 000 Estimated machine hours 1.000 4.000 5.000 Depreciation N$6 000 N$6 000 N$6 000 Cutting N$ 202 200 7.000 Value of Buildings N$ You were further provided with the following actual overheads for the department: Assembly N$ 95 500 6 000 Maintenance of machine N$48 000 200 000 100 000 250 000 Estimated labour cost N$ 5.000 2.000 3.000 Required: (a) Prepare an overhead worksheet analysis showing the allocation of all overheads incurred by Chineke Ltd. (21 marks) (b) Re-apportion the human resource overheads to production department using the appropriate basis. (2 marks) (c) Calculate the overhead absorption rate (POR) for each department in Chineke using the machine hour. (2 marks) (d) Calculate the under-or-over absorption cost for each department (Assembly and (5 marks) Cutting).

Answer rating: 100% (QA)

a Overhead Worksheet Analysis Budgeted Overheads Human Resources600004400013000048000282000 Assembly100000200040002000108000 Cutting250000300050003000261000 Total4100004900013900053000651000 Cost Centers Building Repairs Cafeteria Cost Factory Lighting Maintenance of Machines Total Budgeted Overheads Human Resources 60000 44000 130000 48000 282000 Assembly ... View the full answer