Question 4 (22 marks) Helm Ltd. has two production departments and two service department and presented...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 4 (22 marks) Helm Ltd. has two production departments and two service department and presented the following data for the period ending 30 June 2020. The production departments are forming and assembly and the service departments are maintenance and stores. The following budgeted overheads and budgeted activity levels have been provided: Forming $560,000 Overhead cost Labour hours Machine hours Maintenance Stores 65,000 80,000 Labour hours Machine hours Overhead cost Assembly $430,000 It has been estimated that service department usage is as follows: Forming Assembly 30% 55% 40% 50% 88,000 72,000 Forming 73,000 95,000 $680,000 Maintenance $250,000 Maintenance 10% Actual overheads and activity levels in the production departments were as follows: Assembly 89,000 64,000 $760,500 Stores $130,000 Stores 15% Required: (a) Use the simultaneous equation method to derive the re-allocated overheads to production departments and derive the overhead absorption rates for these departments. (14 marks) (b) Calculate the over/under absorption of overheads in each department. (4 marks) (c) Explain the terms 'overhead allocation' and 'overhead apportionment'. (4 marks) Question 4 (22 marks) Helm Ltd. has two production departments and two service department and presented the following data for the period ending 30 June 2020. The production departments are forming and assembly and the service departments are maintenance and stores. The following budgeted overheads and budgeted activity levels have been provided: Forming $560,000 Overhead cost Labour hours Machine hours Maintenance Stores 65,000 80,000 Labour hours Machine hours Overhead cost Assembly $430,000 It has been estimated that service department usage is as follows: Forming Assembly 30% 55% 40% 50% 88,000 72,000 Forming 73,000 95,000 $680,000 Maintenance $250,000 Maintenance 10% Actual overheads and activity levels in the production departments were as follows: Assembly 89,000 64,000 $760,500 Stores $130,000 Stores 15% Required: (a) Use the simultaneous equation method to derive the re-allocated overheads to production departments and derive the overhead absorption rates for these departments. (14 marks) (b) Calculate the over/under absorption of overheads in each department. (4 marks) (c) Explain the terms 'overhead allocation' and 'overhead apportionment'. (4 marks)
Expert Answer:
Related Book For
Managerial Accounting An Introduction to Concepts Methods and Uses
ISBN: 978-0324639766
10th Edition
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil
Posted Date:
Students also viewed these accounting questions
-
This shoulder bolt is composed of hot-rolled monel. The head of the shoulder bolt is a regular hexagon and it measures 8 mm across opposite flats. The other dimensions of the bolt are given below, as...
-
A horizontal jet of water (at 10C) that is 6 cm in diameter and has a velocity of 20 m/s is deflected by the vane as shown. If the vane is moving at a rate of 7 m/s in the x-direction, what...
-
Hamlet acquires a 7-year class asset on November 23, 2017, for $100,000. Hamlet does not elect immediate expensing under 179. He does not claim any available additional first-year depreciation....
-
Every two weeks, No More Pencils, Inc., disburses checks that average $124,000 and take seven days to clear. How much interest can the company earn annually if it delays transfer of funds from an...
-
The production department of Zunni's Manufacturing is considering two numerically controlled drill presses; one must be selected. Comparison data is shown in the table below. MARR is 10 percent/year....
-
Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1,500 per month, has just purchased a new BMW. You decided to test the accuracy of the accounts receivable balance of $82,000...
-
An owner arrives to collect her dog's prescription for ampicillin tablets. The dog weighs 23 kg and the dose of ampicillin suggested by the vet is 15 mg/kg/t.i.d. You have the tablets available in...
-
Operations and supply chain ___________________________ leverages the vast amount of data in enterprise resource planning systems to make decisions related to managing resources.
-
One share of Division Atlantic Railroad pays a yearly dividend of $7.03, with the first payment one year from today. This dividend will grow by 2.7% per year. The discount rate for these cash flows...
-
JUnit: PrimeGensTest.java In Python 3, all kinds of lazy sequences are easy to produce with generators , special functions that yield their results one element at the time and then continue their...
-
Research "mediation and arbitration agreement". Conduct additional research into these types of arrangements where employers mandate how employment-related disputes will be resolved. These are legal,...
-
ABC CORP DATA FOR YEAR 2022 D=Bonds = 180 m E= Equity = 200 m Levered Beta BL= 1.6 Coefficient MTB= 30% Marginal Tax Bracket MTB= Y= 70% ABC Needs your help in Calculating its Beta coefficient if pay...
-
We want to have notifications that can be sent to the Console to simulate an external Event Logging System that may be used for Analytics and Live Monitoring. Implement Observer pattern being the...
-
There are 40 flavors of Insomnia Cookies. If Harry plans to make a box of 5 cookies of 5 different flavors, how many different boxes are possible?
-
Which answer best describes why Dr. Martin Luther King responded almost immediately by organizing a bus boycott after the Rosa Parks incident in Montgomery, AL? O The boycott resulted from his civil...
-
Using the theoretical sampling strategy, how many samples of size 4 (n = 4) can be drawn from a population of size: (a) N = 5? (b) N = 8? (c) N = 16? (d) N = 50?
-
Meals.com, Inc., which produces and ships frozen meals, has the plant capacity to produce 10,000 units annually. Its predicted operations for the year follow: Sales (8,000 units at $10 each)...
-
Quality Cabinet Construction is considering introducing a new cabinet-production seminar with the following price and cost characteristics:...
-
For control purposes, why is an efficiency variance not calculated for fixed manufacturing overhead?
-
Use the magnitudes (Richter scale) of the earthquakes listed in Data Set 16 in Appendix B. In 1989, the San Francisco Bay Area was struck with an earthquake that measured 7.0 on the Richter scale....
-
Based on data from Data Set 17 in Appendix B, the words spoken in a day by women have a mean of 16,215 words and a standard deviation of 7301 words. Consider the women with an unusual word count in a...
-
Measures of Location The values of P 50 , Q 2 , and the median are found for the net incomes reported on all individual 1040 tax forms filed last year. What do those values have in common?
Study smarter with the SolutionInn App