17.A factory in London processes turkeys for sale. The production process is classifiedinto four cost centres and the budget for each of the cost centre is as follows:Indirect labourConsumablesHeating & lightingRent and ratesDepreciationSupervisionPowerThe following information is also available:Labour hoursMachine hoursFloor space (sq metres)Book value of machinery ($)No. of employeesKilowatt hoursDirect materials ($)Direct labour ($)Maintenance hoursRequired:(a)TotalS340,000 120,000Cutting Cooking$S140,00082,000 24,000 32,00024,00036,00060,000(b)48,00040,000630,000(c)Total16020,000Canteen MaintenanceS30,000 50,00020,000 6,000Cutting Cooking Canteen Maintenance10,0006,00020,000 40,00010101,0002,00060,000 20,000 24,000600,000 300,000240,000809,000100,00050,0008,00012,64010,300608,00050,00042,0006,0008,40015,700Draw up a suitable columnar form and distribute the budgeted overhead costsover the four cost centres, using appropriate bases.Reapportion the accumulated costs of the two service centres over the twoproduction cost centres using suitable bases.Use appropriate bases to calculate the overhead absorption rates for eachproduction department.

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Description: 17.A factory in London processes turkeys for sale. The production process is classifiedinto four cost centres and the budget for each of the cost centre is as follows:Indirect labourConsumablesHeating & lightingRent and ratesDepreciationSupervisionP

Discription Total Cutting Cooking Canteen Maintance Kilowatt. Hours 20000 9000 8000 1000 2000…

Answered: Draw up a suitable columnar form and…

Business

Accounting

Draw up a suitable columnar form and distribute the budgeted overhead costs over the four cost centres, using appropriate bases..

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

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Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

17.
A factory in London processes turkeys for sale. The production process is classified
into four cost centres and the budget for each of the cost centre is as follows:
Indirect labour
Consumables
Heating & lighting
Rent and rates
Depreciation
Supervision
Power
The following information is also available:
Labour hours
Machine hours
Floor space (sq metres)
Book value of machinery ($)
No. of employees
Kilowatt hours
Direct materials ($)
Direct labour ($)
Maintenance hours
Required:
(a)
Total
S
340,000 120,000
Cutting Cooking
$
S
140,000
82,000 24,000 32,000
24,000
36,000
60,000
(b)
48,000
40,000
630,000
(c)
Total
160
20,000
Canteen Maintenance
S
30,000 50,000
20,000 6,000
Cutting Cooking Canteen Maintenance
10,000
6,000
20,000 40,000
10
10
1,000
2,000
60,000 20,000 24,000
600,000 300,000
240,000
80
9,000
100,000
50,000
8,000
12,640
10,300
60
8,000
50,000
42,000
6,000
8,400
15,700
Draw up a suitable columnar form and distribute the budgeted overhead costs
over the four cost centres, using appropriate bases.
Reapportion the accumulated costs of the two service centres over the two
production cost centres using suitable bases.
Use appropriate bases to calculate the overhead absorption rates for each
production department.

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