QUESTION 4PTS Ltd is a manufacturing company which uses three production and three service departments to make itsproducts. It has the following overhead costs from primary distribution.Production Departments:Mixing $234,980Assembly $345,900Finishing $134,525Service Departments:Stores $120,354Accounts $238,970Canteen $ 89,700Other overhead costs which are yet to be distributed are as follows:Factory rent2,685,500Business rates$ 3,450,900Heat and lighting $ 985,350Machinery powerDepreciationCanteen subsidy$ 2,890,600$ 600,000$ 256,000The basis of apportioning the overheard cost is given as follows:MixAsFinStorAcctCanNumber of employeesFloor area occupied (m sq)506018612241,8001,4008001000400600Horse power of machine 13,000 500Value of machine ($'000) 2506,50020010040030120502030Overheads allocated to service departments are redistributed to the production departments as follows:MixAssFinStores50%30%20%Accounts15%25%60%Canteen25%55%20%Labour hours (000)10014035Machine hours (000)2003690Required:A. Prepare overhead analysis sheet to determine the total overhead allocated to production departments.NB: Round all figures up to the nearest whole number.B. Calculate the overhead absorption rates using an appropriate baseC. Assuming PTS manufactures two products: Mang and Banny.Mang has a direct cost of $100. It's manufacturing process uses 10 hours in Mixing, 10 hours in Assembly and 2 hoursin finishing department. Banny has a direct cost of $200 and each unit requires 10 hours in Mixing, 20 hours inAssembly and 20 hours in Finishing. Calculate the manufacturing costs assigned to each unit of product.

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Réquired: A. Prepare overhead analysis sheet to determine the total overhead allocated to production departments. NB: Round all figures up to the nearest whole number. B. Calculate the overhead absorption rates using an appropriate base C. Assuming PTS manufactures two products: Mang and Banny. Mang has a direct cost of $100. It's manufacturing process uses 10 hours in Mixing, 10 hours in Assembly and 2 hours in finishing department. Banny has a direct cost of $200 and each unit requires 10 hours in Mixing, 20 hours in Assembly and 20 hours in Finishing. Calculate the manufacturing costs assigned to each unit of product.

Réquired: A. Prepare overhead analysis sheet to determine the total overhead allocated to production departments. NB: Round all figures up to the nearest whole number. B. Calculate the overhead absorption rates using an appropriate base C. Assuming PTS manufactures two products: Mang and Banny. Mang has a direct cost of $100. It's manufacturing process uses 10 hours in Mixing, 10 hours in Assembly and 2 hours in finishing department. Banny has a direct cost of $200 and each unit requires 10 hours in Mixing, 20 hours in Assembly and 20 hours in Finishing. Calculate the manufacturing costs assigned to each unit of product.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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