Birdie Limited is a manufacturing company producing a variety of golf clubs. Itoperates from one factory that is geographically separated from its head office. Thecomponents for the clubs are assembled in the assembling department; they arethen passed through to the finishing department where they are painted and packed.There are three service cost centres: administration, stores, and manufacturingsupport. The following costs were collected for the year to 31 May 2021:DepartmentAllocated cost centreNumber ofoverhead costs (£,000)2256030089employees67AssemblingFinishingAdministration13484Stores17Manufacturing support12034Additional information:The allocated cost centre overhead costs are all considered to be indirect costsas far as specific units are concerned.During the year to 31 May 2021, 208,000 machine hours were worked in theassembling department, and 270,000 direct labour hours in the finishingdepartment.During the year to 31 May 2021, the stores department received 75,000requisitions from the assembling department, and 50,000 requisitions from thefinishing department. The stores department did not provide a service for anyother department. Stores costs can be apportioned using the number ofrequisitions.Administration costs can be apportioned on the basis of employees.The manufacturing support department carried out 17,000 chargeable hours forthe assembling department, and 9,000 chargeable hours for the finishingdepartment. The manufacturing support department did not provide a servicefor any other department. Manufacturing support costs can be apportionedusing the number of chargeable hours.100 special clubs were produced during the year to 31 May 2021. They took 61machine hours of assembling time, and 134 direct labour hours were worked onthem in the finishing department. Their total direct costs (material and labour)amounted to £2,750. а)Calculate an appropriate absorption rate for the assembling departmentand the finishing department?

It is the rate used to charge the overheads to the intended cost unit at a predetermined level of…

Birdie Limited is a manufacturing company producing a variety of golf clubs. It operates from one factory that is geographically separated from its head office. The components for the clubs are assembled in the assembling department; they are

Birdie Limited is a manufacturing company producing a variety of golf clubs. It operates from one factory that is geographically separated from its head office. The components for the clubs are assembled in the assembling department; they are

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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