The annual overhead costs for the Collins Brew Company Ltd which has three production centres (two machine
Question:
The annual overhead costs for the Collins Brew Company Ltd which has three production centres (two machine centres and one assembly centre) and two service centres (materials procurement and general factory support) are as follows:
GH¢ GH¢
Indirect wages and supervision
Machine centres: A 3,000,000
B3,000,000
Assembly 4,500,000
Materials procurement 3,300,000
General factory support 4,440,000 18,240,000
Indirect materials
Machine centres: A 1,500,000
B 2,415,000
Assembly 315,000
Materials procurement 0
General factory support 30,000 4,260,000
Lighting and heating 1,500,000
Property taxes 3,000,000
Insurance of machinery 450,000
Depreciation of machinery 4,500,000
Insurance of buildings 750,000
Salaries of works management 2,400,000 12,600,000
35,100,000
The following information is also available:
VALUE OF MACHINERY
FLOOR AREA (SQ. METERS)
NUMBER OF EMPLOYEES
DIRECT LABOUR HOURS
MACHINE HOURS
GH¢
MACHINE SHOP: A
24000000
30000
900
3000000
6000000
B
15000000
15000
600
3000000
2000000
ASSEMBLY
3000000
45000
900
6000000
STORES/MATERIAL PROCUREMENT
1500000
45000
300
MAINTENANCE/GEN. FACTORY SUPPORT
1500000
15000
300
45000000
150000
3000
Details of total materials issues (i.e. direct and indirect materials) to the production centres are as follows:
¢
Machine shop X
12,000,000
Machine shop Y
9,000,000
Assembly
3,000,000
24,000,000
The service rendered by the factory support department to Machine shop A, Machine Shop B and Assembly was 25%, 25% and 50% respectively.
Required:
Prepare the overhead analysis sheet and calculate the amount of overheads to charge if the product spends 60 hours in Machine shop X and 135 hours in Machine shop Y and 15 hours in Assembly department
South Western Federal Taxation 2016 Corporations Partnerships Estates and Trusts
ISBN: 9781305399884
39th edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young