14.A company is preparing its production overhead budgets and determining theapportionment of these overheads to products.Cost centres expenses and related information have been budgeted as follows:Production Cost CentreMachine MachineDept A ($) Dept B ($)8,5869,1906,4008,700Indirect wagesIndirectmaterialsRentalBldg.insurancePowerAirFloor space(sq. metres)Value ofTotalconditioning3,400Machinedepreciation 40,200machineryPower78,56016,90016,700The following information is also available:(kilowatt hrs)Direct labourhrsMachine hrs2,4008,600Total MachineDept A45,00010,000$402,000 $201,000 $179,00010035,00025,200558,0007,2001112,00040Service Cost CentreAssembly Canteen Maintenance($) ($)($)6,20000015,6741,200Machine Assembly Canteen MaintenanceDept B29,650360015,000 6,00022,00020,80015,4602,000Required:(a) Prepare a statement showing the allocation and apportionment of overheads to thecost centres, showing clearly the basis of apportionment.(b) Apportion the overheads of service cost centres to production cost centres, usingappropriate bases.2

Overhead costs refers to the expenses which are not directly concerned with the production or…

company is preparing its production overhead budgets and determi portionment of these overheads to products. st centres expenses and related information have been budgeted as follows: Production Cost Centre Service Cost

company is preparing its production overhead budgets and determi portionment of these overheads to products. st centres expenses and related information have been budgeted as follows: Production Cost Centre Service Cost

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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how to allocate manufacturing overhead by department?
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000
What does a manufacturing overhead budget tell us?
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000
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A report prepared periodically by a processing department, summarizing (1) the units for which the department is accountable and the disposition of those units and (2) the costs incurred by the department and the allocation of those costs between completed and incomplete production, is termed a a. manufacturing cost report b. factory overhead production report C. cost of production report d. process cost report
Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Sentence a. An example of factory overhead is b. Direct materials costs combined with direct labor costs are called c. Long-term plans are called d. Advertising costs are usually viewed as plans. costs. costs. e. The management process by which management monitors operations by comparing actual and expected results is f. The plant manager's salary would be considered to the product. g. The salaries of factory supervisors are normally considered a cost.
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An activity based costing system is used at Haldeman, SA to assign products overhead costs. First, the two overhead costs of Equipment depreciation and Water expense are allocated to three activity cost pools - Handling, Machining, and Other - based on resource consumption. The information used to perform these allocations is below: Overhead Costs: Equipment depreciation: $50,000 Water expense: $60,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Handling Machining Other Equipment depreciation 0.28 0.34 0.38 Water expense 0.32 0.22 0.46 The second stage of allocation is done by assigning the Handling costs to products on the basis of orders filled while products are assigned Machining costs based on machine hours. Costs assigned to the Other activity pool are not further assigned to products. Activity information for Haldeman's only two products is below: orders filled machine hours Product LS-157: 3,400 3,400…
Standard cost are used primarily for: Estimating future costs. To produce financial statements for external users. To judge the performance of accounting managers. To judge the performance of managers involved in the manufacturing process.
Woh Che Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Supervision Utilities Cost Allocation Base $ 82,600 Number of employees 51,000 Square feet occupied 23,000 Value of assets in use Insurance Total $156,600 Departmental data for the company's recent reporting period follow. ETII Employees Square Feet 22,000 11,000 55,000 22,000 Department Materials Asset Values $ 6,100 1,830 36,600 16,470 24 Personnel Manufacturing Packaging 48 42 Total 120 110,000 $61,000 1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below.