Bond Ltd. has two support departments, HR, and IT and two production departments, Cutting and Stitching....

 

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Bond Ltd. has two support departments, HR, and IT and two production departments, Cutting and Stitching. Budgeted manufacturing overhead costs and budgeted activity in the departments for the current year are shown below: Support Departments Production Departments HR IT Cutting Stitching Departmental costs $50,000 $100,000 $100,000 $200,000 Square metres Number of employees Machine hours 500 1,000 1,000 2,000 15 20 20 30 - - Labour Hours 25,000 45,000 50,000 100,000 100,000 120,000 The company uses the step method to allocate support department costs to production departments. The overhead cost of the HR department is allocated first based on square metres occupied. The overhead cost of the IT department is allocated based on the number of employees. Predetermined overhead rates in both the production departments are based on machine hours. The product produced by Bond Ltd. (product 008) requires 4 machine hours per unit in the cutting department and 2 machine hours per unit in the stitching department. Prime cost of the product is $50 per unit. Bond Ltd. prices its product at full production cost plus 250% as profit margin. Required: 1. Allocate the support departments overhead costs to the production departments and calculate the total budgeted manufacturing overhead cost of each production department. 2. Calculate the predetermined manufacturing overhead rate for the cutting department. 3. Calculate the predetermined manufacturing overhead rate for the stitching department. (Round amount to two decimal places) 4. Should actual or budgeted support department overhead costs be allocated to the production departments? Briefly explain your answer. 5. Calculate the per unit price of the product (product 008). Start your answer here: (8+1.5+ 1.5+ 2.5 +3.5 17 marks) Bond Ltd. has two support departments, HR, and IT and two production departments, Cutting and Stitching. Budgeted manufacturing overhead costs and budgeted activity in the departments for the current year are shown below: Support Departments Production Departments HR IT Cutting Stitching Departmental costs $50,000 $100,000 $100,000 $200,000 Square metres Number of employees Machine hours 500 1,000 1,000 2,000 15 20 20 30 - - Labour Hours 25,000 45,000 50,000 100,000 100,000 120,000 The company uses the step method to allocate support department costs to production departments. The overhead cost of the HR department is allocated first based on square metres occupied. The overhead cost of the IT department is allocated based on the number of employees. Predetermined overhead rates in both the production departments are based on machine hours. The product produced by Bond Ltd. (product 008) requires 4 machine hours per unit in the cutting department and 2 machine hours per unit in the stitching department. Prime cost of the product is $50 per unit. Bond Ltd. prices its product at full production cost plus 250% as profit margin. Required: 1. Allocate the support departments overhead costs to the production departments and calculate the total budgeted manufacturing overhead cost of each production department. 2. Calculate the predetermined manufacturing overhead rate for the cutting department. 3. Calculate the predetermined manufacturing overhead rate for the stitching department. (Round amount to two decimal places) 4. Should actual or budgeted support department overhead costs be allocated to the production departments? Briefly explain your answer. 5. Calculate the per unit price of the product (product 008). Start your answer here: (8+1.5+ 1.5+ 2.5 +3.5 17 marks)

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Heres the corrected subsidiary ledger Accounts Payable Subsidiary Ledger 1 Charleston Corporation Balance as of July 1 9120 2 Cedarbrook Garden Center ... View the full answer