QUESTION $1$

$(20$ MARKS$)$

REQUIRED

Study the information given below and answer the following questions:

$1\mathrm{.}1$

Prepare the Overhead Allocation Statement.

$(16$ marks$)$

$1\mathrm{.}2$

Calculate the overhead allocation rate of Production Department A$.$

$(2$ marks$)$

$1\mathrm{.}3$

Calculate the overheads applied to the product from Production Department A$.$

$(2$ marks$)$

INFORMATION

Maple Ltd gathered the following statistics in order to allocate their overheads among the different departments during $2025$:

Production Department A

Production Department B

Service

Department M

Direct labour hours

$10000$

$5000$

$3000$

Machine hours

$6000$

$4000$

$2000$

Value of the machinery

R$225000$

R$135000$

R$90000$

Number of employees

$540$

$360$

$300$

Floor space

$6000$m$2$

$3000$ m$2$

$1000$ m$2$

Materials used

R$600000$

R$450000$

R$75000$

The budgeted overheads for $2025$ are as follows:

Overheads

R

Electricity

$60000$

Protective clothing

$48000$

Depreciation on machinery

$54000$

Rent of factory buildings

$135000$

Cafeteria

$40000$

Insurance of the factory buildings

$27000$

Insurance of the machinery

$45000$

The product spends $10$ labour hours in Department A and $5$ labour hours in Department B$.$

Overhead allocation rates are based on labour hours, while the secondary apportionment of the service department takes place according to machine hours.

$12000$

$450000$

$1200$

$10000$

$1125000$

Number of Employees

Value of Machines

Floor Area

Number of Employees

Machine Hours

Show Overhead Allocation Statement