XL Enterprises operates a factory with four departments. Two of the departments: welding and assembly are...

 

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XL Enterprises operates a factory with four departments. Two of the departments: welding and assembly are production departments, whereas canteen and stores provide a service. The budgeted costs were as follows: Indirect costs Indirect material Indirect labour Supervision Rent and rates Factory insurance Plant depreciation Plant insurance Welding Machine hours $ 2,000 4,500 Number of employees Area (square metres) Plant Valuation($000) Number of stores requisitions Direct labour hours Assembly You are given the following additional information: 80 3,200 3,500 $ 6,000 9,000 500 2,000 2,802 Canteen 40 500 1,000 $ 10,000 6,000 300 1,239 Stores 4,500 15 300 $ 1,000 Welding Assembly Canteen Stores 3,000 600 200 Total $ 6,000 10,000 12,000 15 20,000 4,000 6,000 8,000 1,000 400 Required: a) Apportion all indirect costs among the relevant departments. b) Re-apportion service department costs to production departments c) Calculate machine hour overhead absorption rate for welding and a labour hour overhead absorption rate for assembly. (4 marks) (16 marks) (5 marks) XL Enterprises operates a factory with four departments. Two of the departments: welding and assembly are production departments, whereas canteen and stores provide a service. The budgeted costs were as follows: Indirect costs Indirect material Indirect labour Supervision Rent and rates Factory insurance Plant depreciation Plant insurance Welding Machine hours $ 2,000 4,500 Number of employees Area (square metres) Plant Valuation($000) Number of stores requisitions Direct labour hours Assembly You are given the following additional information: 80 3,200 3,500 $ 6,000 9,000 500 2,000 2,802 Canteen 40 500 1,000 $ 10,000 6,000 300 1,239 Stores 4,500 15 300 $ 1,000 Welding Assembly Canteen Stores 3,000 600 200 Total $ 6,000 10,000 12,000 15 20,000 4,000 6,000 8,000 1,000 400 Required: a) Apportion all indirect costs among the relevant departments. b) Re-apportion service department costs to production departments c) Calculate machine hour overhead absorption rate for welding and a labour hour overhead absorption rate for assembly. (4 marks) (16 marks) (5 marks)

Answer rating: 100% (QA)

a Apportion of indirect costs Welding Assembly Canteen Stores Total Basis Ratio Indirect Material 20... View the full answer