Homework Help is Here – Start Your Trial Now!
Business
Accounting
Required: 1) Assign all manufacturing overheads to production and service costs. 2) Reallocate the costs assigned to service cost to production costs on the basis 3:2. 3) Compute separate overhead rates for each production cost.

Required: 1) Assign all manufacturing overheads to production and service costs. 2) Reallocate the costs assigned to service cost to production costs on the basis 3:2. 3) Compute separate overhead rates for each production cost.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Please do not give solution in image format ? And Fast Answering Please ? And Explain Proper Step by Step.

Question 1. The production process of Quality Builders Limited is classified into two production departments, Assembly and Finishing. Moreover, there is one service department, namely, Maintenance. The Maintenance department does not have supervisors. The relevant information for the year 2019 is as follows: Indirect costs for all three departments in total: Item Depreciation & insurance of machinery Production supervisor's salary Canteen costs The following information is available about each department: Item Assembly Indirect Material 900,000 Indirect Labour 350,000 Book value of machinery 2,000,000 Number of employees Machine hours Labour hours 50 1,500 2,500 Total Finishing 450,000 150,000 500,000 30 1,000 2,179 Total (£) 750,000 200,000 120,000 1,070,000 Maintenance Required: 1) Assign all manufacturing overheads to production and service costs. 2) Reallocate the costs assigned to service cost to production costs on the basis 3:2. 3) Compute separate overhead rates for each production cost. 20
Transcribed Image Text:Question 1. The production process of Quality Builders Limited is classified into two production departments, Assembly and Finishing. Moreover, there is one service department, namely, Maintenance. The Maintenance department does not have supervisors. The relevant information for the year 2019 is as follows: Indirect costs for all three departments in total: Item Depreciation & insurance of machinery Production supervisor's salary Canteen costs The following information is available about each department: Item Assembly Indirect Material 900,000 Indirect Labour 350,000 Book value of machinery 2,000,000 Number of employees Machine hours Labour hours 50 1,500 2,500 Total Finishing 450,000 150,000 500,000 30 1,000 2,179 Total (£) 750,000 200,000 120,000 1,070,000 Maintenance Required: 1) Assign all manufacturing overheads to production and service costs. 2) Reallocate the costs assigned to service cost to production costs on the basis 3:2. 3) Compute separate overhead rates for each production cost. 20
Expert Solution
steps

Step by step

Solved in 6 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS