QUESTION $1$

$(20$ Marks$)$

A Cape Town$-$based manufacturing firm, CGH Manufacturing Enterprises $($CGHME$),$ has three production departments

$(A,B$ and $C)$ and the two service departments $(x$ and $Y).$ As part of the budgeting process, a senior cost accountant

employed by CGHME has gathered the following annual overhead costs:

The following information is also available:

As an accounting intern in the office of the senior cost accountant, you have been asked to prepare an overhead allocation

statement $($using traditional costing$).$ You have been asked to use the repeated distribution method to prepare the

secondary allocation of the overheads of the two service departments and $Y)$ to the three production departments $(A,$

$B$ and $C)$ according to the following percentages:

The three production departments and $C$ absorb overheads on machine hour basis. REQUIRED:

$1\mathrm{.}1.$ Complete the primary allocation statement below.

$(7$ marks$)$

$\backslash$table$[[,$Basis,Total,PD A$,$PD B$,$PD C$,$SD X$,$SD Y$],[$Primary allocations:$],[$Indirect materials,Given,$765000,250000,402500,52500,10000,50000],[$Indirect labour,Given,$3040000,500000,500000,750000,550000,740000],[$Heating and lighting,Floor Area,$350000,?,?,105000,105000,?],[$Property tax,Floor Area,$400000,80000,40000,?,?,?],[$Insurance of machinery,Mach. value,$180000,?,60000,12000,6000,6000],[$Dep$.$ of machinery,Mach. value,$960000,512000,?,?,32000,32000],[$Insurance of buildings,Floor Area,$145000,?,?,43500,43500,14500],[\backslash$table$[[$Salaries of works$],[$management$]],\backslash$table$[[$No$.$ of$],[$employ$]],4600000,1380000,?,?,?,460000],[$Total primary allocations,,$10440000,2917000,2292000,2527000,1326500,1377500]]$

$1\mathrm{.}2.$ Complete the secondary allocation statement below $($where applicable, round of figures to two decimal places$).(6$ marks$)$

$\backslash$table$[[,$Production departments,Service departments$],[,$A$,$B$,$C$,$x$,$Y$],[$Total primary allocation, R$,2917000,2292000,2527000,1326500,1377500],[$Service department x$,?,?,?,?,?],[$Service department Y$,?,?,?,?,?],[$Service department x$,?,?,?,?,?],[$Service department Y$,?,?,?,?,?],[$Service department x$,?,?,?,?,?],[$Service department Y$,?,?,?,?,?],[$Service department x$,?,?,?,?,?],[$Service department Y$,?,?,?,?,?],[$Service department x$,?,?,?,?,?],[$Service department Y$,?,?,?,?,?],[$Total allocated overhead,?,?,?,$*,*]]$

$1\mathrm{.}3.$ Calculate the predetermined overhead absorption rates for the three production departments $(A,B$ and $C)$ of $CGH$ Manufacturing Enterprises for the forthcoming quarter $($round off answers to two decimal places$).$

$(3$ marks$)$

$1\mathrm{.}4.$ By citing the management accounting literature, state four $(4)$ advantages of predetermined overhead rate. $(4$ marks$)$QUESTION $1(20$ Marks$)$ A Cape Town$-$based manufacturing firm, CGH Manufacturing Enterprises $($CGHME$),$ has three production departments $($A$,$ B and C $)$ and the two service departments $($ x and Y $).$ As part of the budgeting process, a senior cost accountant employed by CGHME has gathered the following annual overhead costs: $\backslash$table$[[,$R$],[$Indirect materials:,$],[$Production department A$,250000],[$Production department B$,402500],[$Production department C$,52500],[$Service department X$,10000],[$Service department Y$,50000],[$Indirect labour:,$],[$Production department A$,500000],[$Production department B$,500000],[$Production department C$,750000],[$Service department X$,550000],[$Service department Y$,740000],[$Heating and lighting,$350000],[$Property tax,$400000],[$Insurance of machinery,$180000],[$Depreciation of machinery,$960000],[$Insurance of buildings,$145000],[$Salaries of works management,$4600000]]$ The following information is also available: $\backslash$table$[[,\backslash$table$[[$Carrying value of$],[$machinery$,$ R$]],\backslash$table$[[$Floor area$],[$occupied $($m$^(2))$