Bigman Limited needs to allocate and apportion their overhead costs for the next accounting period. They...

 

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Bigman Limited needs to allocate and apportion their overhead costs for the next accounting period. They asked you as a cost accounting expert to assist them with this task. They have given you the following information to work with: Budgeted Values Direct material Direct labour Indirect material: Department A Indirect material: Department B Indirect labour: Administration department Indirect labour: Stores receiving department Indirect labour: Department A Indirect labour: Department B Factory Rent Insurance on machinery Factory electricity Cafeteria costs N$550 625 N$413 867 N$16 850 N$6 890 N$7 000 N$5 000 N$16 500 N$6 000 N$787 500 N$149 000 N$385 000 N$23 400 The following information is also available on the activities used within each department: Service Production Cafeteria Stores receiving 750 N$4 000 Department Department A 150 1 250 N$175 000 1 000 Floor area (m²) Book value of Machinery Kilowatt usage Direct labour hours Machine hours Number of workers Material usage (kg) N$110 000 46 000 N$9 000 2 200 0. 1 300 143 000 1 920 2 840 680 1 400 1 400 10 12 4 32 745 20 000 0. Secondary allocation should be done on the following bases: Cafeteria: Stores receiving: Number of workers Material usage Secondary apportionment is done applying the step method. Department A is labour intensive while Department B is capital intensive. Mark Sub- Total Requirement total Assist Bigman Ltd to determine the primary and secondary allocation 1.2.1 | and apportionment of manufacturing overhead costs to the different departments. Calculate the predetermined overhead rate applicable to Department A and B. 10 10 4 14 1.2.2 Note: Show all the necessary workings or steps that are required to reach the answer. Marks are available for these Total 14 Bigman Limited needs to allocate and apportion their overhead costs for the next accounting period. They asked you as a cost accounting expert to assist them with this task. They have given you the following information to work with: Budgeted Values Direct material Direct labour Indirect material: Department A Indirect material: Department B Indirect labour: Administration department Indirect labour: Stores receiving department Indirect labour: Department A Indirect labour: Department B Factory Rent Insurance on machinery Factory electricity Cafeteria costs N$550 625 N$413 867 N$16 850 N$6 890 N$7 000 N$5 000 N$16 500 N$6 000 N$787 500 N$149 000 N$385 000 N$23 400 The following information is also available on the activities used within each department: Service Production Cafeteria Stores receiving 750 N$4 000 Department Department A 150 1 250 N$175 000 1 000 Floor area (m²) Book value of Machinery Kilowatt usage Direct labour hours Machine hours Number of workers Material usage (kg) N$110 000 46 000 N$9 000 2 200 0. 1 300 143 000 1 920 2 840 680 1 400 1 400 10 12 4 32 745 20 000 0. Secondary allocation should be done on the following bases: Cafeteria: Stores receiving: Number of workers Material usage Secondary apportionment is done applying the step method. Department A is labour intensive while Department B is capital intensive. Mark Sub- Total Requirement total Assist Bigman Ltd to determine the primary and secondary allocation 1.2.1 | and apportionment of manufacturing overhead costs to the different departments. Calculate the predetermined overhead rate applicable to Department A and B. 10 10 4 14 1.2.2 Note: Show all the necessary workings or steps that are required to reach the answer. Marks are available for these Total 14

Answer rating: 100% (QA)

Primary allocation Activity cost pool cost driver Ratio Total Amount Department A Department B store ... View the full answer