MANUFACTURING OVERHEADS Thumamina Limited manufactures various products that are produced in two production departments: Department Q and Department V. In addition to these two production departments, the company has a service department, which provides support to the production departments. The following additional information is available: Department Q Department V Service department Number of employees 150 100 80 Floor space 2 050 m? 1 250 m2 1 100 m2 Value of machinery R900 000 R300 000 R250 000 Kilowatt hours 1 300 1 000 400 Labour hours 5 000 4 000 150 Machine hours 4 000 2 000 100 The budgeted manufacturing overheads for 2018 are as follows: Rent of building R1 010 000 Electricity R95 000 Depreciation of machinery (based on machine hours) R230 000 Salaries of supervisors R380 500 Insurance buildings (based on value of machinery) R150 755 Indirect material: Department Q R88 000 Department V R35 000 Service department R27 000 Required: Calculate the primary allocation of overheads per department as well as the secondary allocation per production department. The secondary allocation is done based on machine hours. Note: Round off all amounts to the nearest
MANUFACTURING OVERHEADS Thumamina Limited manufactures various products that are produced in two production departments: Department Q and Department V. In addition to these two production departments, the company has a service department, which provides support to the production departments. The following additional information is available: Department Q Department V Service department Number of employees 150 100 80 Floor space 2 050 m? 1 250 m2 1 100 m2 Value of machinery R900 000 R300 000 R250 000 Kilowatt hours 1 300 1 000 400 Labour hours 5 000 4 000 150 Machine hours 4 000 2 000 100 The budgeted manufacturing overheads for 2018 are as follows: Rent of building R1 010 000 Electricity R95 000 Depreciation of machinery (based on machine hours) R230 000 Salaries of supervisors R380 500 Insurance buildings (based on value of machinery) R150 755 Indirect material: Department Q R88 000 Department V R35 000 Service department R27 000 Required: Calculate the primary allocation of overheads per department as well as the secondary allocation per production department. The secondary allocation is done based on machine hours. Note: Round off all amounts to the nearest
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 8E
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Question
![MANUFACTURNG OVERHEADS
Thumamina Limited manufactures various produds that are produced in two production departments: Department Q and
Department V. In addition to these two production departments, the company has a service department, which provides
support to the production departments.
The following additional information is available:
Department Q
Department V
Service department
Number of employees
150
100
Floor space
2050 m
1250 m2
1100 m2
Value of machinery
R900 000
R300 000
R250 000
Kilowatt hours
1300
1000
400
Labour hours
5000
4 000
150
Machine hours
4 000
2 000
100
The budgeted manufacturing overheads for 2018 are as follows:
Rent of building
R1010 000
Electricity
R95 000
Depreciation of machinery (based on machine hours)
R230 000
Salaries of supervisors
R380 500
Insurance buildings (based on value of machinery)
R150 755
Indirect material:
Department Q
R88 000
Department V
R35 000
Service department
R27 000
Required
Calculate the primary allocation of overheads per department as well as the secondary allocation per production
department. The secondary allocation is done based on machine hours. Note: Round off all amounts to the nearest
R1.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0d28997d-8fba-4746-81c8-46a23a002f39%2Fd4c63454-69bb-4582-8469-c2c3c3303e12%2Fqwijigp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:MANUFACTURNG OVERHEADS
Thumamina Limited manufactures various produds that are produced in two production departments: Department Q and
Department V. In addition to these two production departments, the company has a service department, which provides
support to the production departments.
The following additional information is available:
Department Q
Department V
Service department
Number of employees
150
100
Floor space
2050 m
1250 m2
1100 m2
Value of machinery
R900 000
R300 000
R250 000
Kilowatt hours
1300
1000
400
Labour hours
5000
4 000
150
Machine hours
4 000
2 000
100
The budgeted manufacturing overheads for 2018 are as follows:
Rent of building
R1010 000
Electricity
R95 000
Depreciation of machinery (based on machine hours)
R230 000
Salaries of supervisors
R380 500
Insurance buildings (based on value of machinery)
R150 755
Indirect material:
Department Q
R88 000
Department V
R35 000
Service department
R27 000
Required
Calculate the primary allocation of overheads per department as well as the secondary allocation per production
department. The secondary allocation is done based on machine hours. Note: Round off all amounts to the nearest
R1.
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