Question Two Apex Ltd manufactures three productsX, Y and Z in two product ion departments: Pi and Pz. The company also has two service departments: Sı and Sz. The compary's budgeted product ion data and manufacturing costs for the year 2021 were as follows: Product z Product ion (units) Direct materials (Shs. per unit) Direct labour: P: (Shs. per unit) 4,200 6,900 1,700 11 14 17 6. 4 2 P2 (shs. Per unit) 12 3 21 Machine hours per unit 6 3 4 Additional information 1. Absorption rates in depart ments Pı and P2 are based on machine hours and labour wages respectively. 2. Budgeted overheads for rent, heating and lighting amounted to shs.17,000 while depreciation and insurance amounted to shs.25,000. 3. The costs of service departmentSzare apportioned to production departments Pi and P2 at the ratio of 7:3 while the costs of S1 are apportioned to depart ments P., P2 and Sz based on the number of employees. 4. Other information includes: P1 P2 S2 27,660 19,47o 16,600 26,650 Budgeted overheads (Shs.) Equipment at net book value (Shs.) Number of employees Floor area (metres square) 150,000 75,000 30,000 45,000 18 14 4 4 3,600 1,400 1,000 800 Required Budgeted over head absorption rates for the two production depart ments Pı and Pz
Question Two Apex Ltd manufactures three productsX, Y and Z in two product ion departments: Pi and Pz. The company also has two service departments: Sı and Sz. The compary's budgeted product ion data and manufacturing costs for the year 2021 were as follows: Product z Product ion (units) Direct materials (Shs. per unit) Direct labour: P: (Shs. per unit) 4,200 6,900 1,700 11 14 17 6. 4 2 P2 (shs. Per unit) 12 3 21 Machine hours per unit 6 3 4 Additional information 1. Absorption rates in depart ments Pı and P2 are based on machine hours and labour wages respectively. 2. Budgeted overheads for rent, heating and lighting amounted to shs.17,000 while depreciation and insurance amounted to shs.25,000. 3. The costs of service departmentSzare apportioned to production departments Pi and P2 at the ratio of 7:3 while the costs of S1 are apportioned to depart ments P., P2 and Sz based on the number of employees. 4. Other information includes: P1 P2 S2 27,660 19,47o 16,600 26,650 Budgeted overheads (Shs.) Equipment at net book value (Shs.) Number of employees Floor area (metres square) 150,000 75,000 30,000 45,000 18 14 4 4 3,600 1,400 1,000 800 Required Budgeted over head absorption rates for the two production depart ments Pı and Pz
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
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.
Topic Video
Question
Transcribed Image Text:Question Two
Apex Ltd manufactures three products X, Y and Z in two product ion departments; P1 and Pz.
The company also has two service departments: Sı and Sz. The company's budgeted
product ion data and manufacturing costs for the year 2021 were as f ollows:
Product
Product ion (units)
Direct materials (Shs. per unit)
Direct labour: P: (Shs. per unit)
4,200 6,900 1,700
11
14
17
6
4
2
P2 (shs. Per unit)
12
3
21
Machine hours per unit
6
3
4
Additional information
1. Absorpt ion rates in depart ments Pı and Pz are based on machine hours and labour wages
respectively.
2. Budgeted overheads for rent, heating and lighting amounted to shs.17,000 while
depreciation and ins urance amount ed to shs.25,000,
3. The costs of service department Szare apportioned to production departments Pi and P2
at the ratio of 7:3 while the costs of Si are apportioned to depart ments Pi Pz and Sz
based on the number of employees.
4. Other information includes:
P1
Pz
S.
Sz
27,660 19,47o 16,600 26,650
Budgeted overheads (Shs.)
Equipment at net book value (Shs.)
Number of employees
Floor area (metres square)
150,000 75,000 30,000 45,000
18
14
4
4
3,600
1,400
1,000
800
Required
Budgeted over head absorption rates for the two production depart ments Pı and Pz
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 2 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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education