The following information was available at the beginning of 2019.Each bus will travel 90 000 kilometres (km) during the year.Road fund licences and insurances for the year will be $4 650 per bus.●CServicing and repairs per bus will be $1 250 every 30 000 km.Each bus costs $320 000 and is expected to have a useful life of six years afterwhich it will have a scrap value of $50 000...All tyres are replaced every 45 000 km at a cost of $600 per tyre. Each bus haseight tyres.●A total of 850 bus trips had been contracted for 2019.(a) Calculate the following overhead absorption rates for the year 2019.(i) Operational overheads per km(ii) Administrative overheads per bus trip(b) Explain one reason why the company uses predetermined overhead absorption●ACCBuntancy and Finance Institute) Ph-09 43013764/89977893rates.(c) Explain one reason why:(i) operational overheads are being absorbed on the basis of km travelled(ii) administrative overheads are being absorbed on the basis of bus tripsOn the six months January to June 2019, Umbriel Ltd had completed 465 bus tripsinvolving a distance of 178 400 km.The administrative overheads incurred were $81 760(d) Calculate the amount of over or under-absorption for each of operationaloverheads and administrative overheads for the six months January(i) Operational overheads(ii) Administrative overheads(e) Evaluate Umbriel Ltd's recovery of overheads for the six months January to June2019.

Some expenses are not directly associated with product, such as rent and electricity, such cost are…

The following information was available at the beginning C Each bus will travel 90 000 kilometres (km) during th Road fund licences and insurances for the year will E ● ● • • Servicing and repairs per bus will be $1 250 every 30 Each bus costs $320 000 and is expected to have a u which it will have a scrap value of $50 000.. ● • All tyres are replaced every 45 000 km at a cost of $ eight tyres. A total of 850 bus trips had been contracted for 201 (a) Calculate the following overhead absorption rates f (i) Operational overheads per km (ii) Administrative overheads per bus trip (b) Explain one reason why the company uses predete rates. (c) Explain one reason why: (i) operational overheads are being absorbed on (ii) administrative overheads are being absorbed On the six months January to June 2019, Umbriel Ltd H involving a distance of 178 400 km. The administrative overheads incurred were $81 760 (d) Calculate the amount of over or under-absorption overheads and administrative overheads for the s (i) Operational overheads (ii) Administrative overheads e) Evaluate Umbriel Ltd's recovery of overheads for 2019.

The following information was available at the beginning C Each bus will travel 90 000 kilometres (km) during th Road fund licences and insurances for the year will E ● ● • • Servicing and repairs per bus will be $1 250 every 30 Each bus costs $320 000 and is expected to have a u which it will have a scrap value of $50 000.. ● • All tyres are replaced every 45 000 km at a cost of $ eight tyres. A total of 850 bus trips had been contracted for 201 (a) Calculate the following overhead absorption rates f (i) Operational overheads per km (ii) Administrative overheads per bus trip (b) Explain one reason why the company uses predete rates. (c) Explain one reason why: (i) operational overheads are being absorbed on (ii) administrative overheads are being absorbed On the six months January to June 2019, Umbriel Ltd H involving a distance of 178 400 km. The administrative overheads incurred were $81 760 (d) Calculate the amount of over or under-absorption overheads and administrative overheads for the s (i) Operational overheads (ii) Administrative overheads e) Evaluate Umbriel Ltd's recovery of overheads for 2019.

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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