Question 2 Edward Ltd comprises of three production departments and two service departments. The following information is provided for Edward Ltd for 2019. £ Supervisor's salaries Machining Factory Rent Heat and light General Repairs Machine Depreciation Machine insurance Business Rates 300,000 Assembly 200,000 Finishing 250,000 Canteen 120,000 Maintenance 150,000 £ 300,000 200,000 60,000 80,000 90,000 75,000 Floor space occupied (m2) 400 Value of machinery (£'000) 300 Service carried out by: Canteen Machining Assembly Finishing Canteen 200 150 50 Maintenance The service departments work for the other departments as follows: 200 400 30% 25% 200 30% 50% Machining Assembly Finishing Canteen Maintenance Maintenance 40% 25% 50 50 Required: a. Using Edward's Ltd overhead analysis sheet for 2019, determine the overhead allocated and apportioned to each of the five departments. b. Calculate the total overheads included in the production departments after the reapportionment of the service department using direct method
Question 2 Edward Ltd comprises of three production departments and two service departments. The following information is provided for Edward Ltd for 2019. £ Supervisor's salaries Machining Factory Rent Heat and light General Repairs Machine Depreciation Machine insurance Business Rates 300,000 Assembly 200,000 Finishing 250,000 Canteen 120,000 Maintenance 150,000 £ 300,000 200,000 60,000 80,000 90,000 75,000 Floor space occupied (m2) 400 Value of machinery (£'000) 300 Service carried out by: Canteen Machining Assembly Finishing Canteen 200 150 50 Maintenance The service departments work for the other departments as follows: 200 400 30% 25% 200 30% 50% Machining Assembly Finishing Canteen Maintenance Maintenance 40% 25% 50 50 Required: a. Using Edward's Ltd overhead analysis sheet for 2019, determine the overhead allocated and apportioned to each of the five departments. b. Calculate the total overheads included in the production departments after the reapportionment of the service department using direct method
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning