Sky Ltd. is a manufacturing company. The production process is divided into two production departments: Assembly and Finishing. There is one service department, the Stores department, which is used only by the Finishing department. The relevant information for the year ahead is as follows: Total Overheads for all the departments: Item Total (£) 300,000 200,000 500,000 Depreciation Rent TOTAL The following information is available about each department: Assembly Finishing Stores 70,000 25,000 5,000 Item Floor Space (m²) Value of machinery (£) Labour hours 85,000 2,000 15,000 500 Considering this information, which of the following statements is true? a. The Overheads Absorption Rate using labour hours for the Assembly department equals £210. b. The Overheads Absorption Rate using labour hours for the Finishing department equals £210. Oc. Total overheads allocated to the Assembly department equal £105,000 and total overheads allocated to the Finishing department equal £395,000. d. None of the answers is true.

Sky Ltd. is a manufacturing company. The production process is divided into two production departments: Assembly and Finishing. There is one service department, the Stores department, which is used only by the Finishing department. The relevant information for the year ahead is as follows: Total Overheads for all the departments: Item Total (£) 300,000 200,000 500,000 Depreciation Rent TOTAL The following information is available about each department: Assembly Finishing Stores 70,000 25,000 5,000 Item Floor Space (m²) Value of machinery (£) Labour hours 85,000 2,000 15,000 500 Considering this information, which of the following statements is true? a. The Overheads Absorption Rate using labour hours for the Assembly department equals £210. b. The Overheads Absorption Rate using labour hours for the Finishing department equals £210. Oc. Total overheads allocated to the Assembly department equal £105,000 and total overheads allocated to the Finishing department equal £395,000. d. None of the answers is true.

Name: Sky Ltd. is a manufacturing company. The production process is divide
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Description: Sky Ltd. is a manufacturing company. The production process is divided into two productiondepartments: Assembly and Finishing. There is one service department, the Stores department, which isused only by the Finishing department. The relevant inform

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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