Turquoise Ltd produces a range of dry food in packets and wet food in cans using different production processes. Estimated total manufacturing costs for the next year include supervisors' salaries of £55,000 for the packing department, £60,000 for the canning department and £32,000 for the canteen. Other overhead costs include depreciation of £59,200, cleaning materials of £7,200 and factory administration of £8,100. Department data for the period is as follows: Department data Packing Department Canning Department Canteen Number of products produced per year Number of cleaning times per year Net book value of equipment Number of workers per department Machine hours per year 580,000 43 500,000 84 £658,900 | £36,100 £446,200 18 15 6. 1,750 1,350 (i) Using the department data in the table above, allocate, apportion and reapportion these estimated costs to calculate a total estimated cost for the year for each of the manufacturing departments (i.e. packing and canning departments). (ii) Calculate an overhead absorption rate for each of the manufacturing departments, using a machine-hour rate.

Turquoise Ltd produces a range of dry food in packets and wet food in cans using different production processes. Estimated total manufacturing costs for the next year include supervisors' salaries of £55,000 for the packing department, £60,000 for the canning department and £32,000 for the canteen. Other overhead costs include depreciation of £59,200, cleaning materials of £7,200 and factory administration of £8,100. Department data for the period is as follows: Department data Packing Department Canning Department Canteen Number of products produced per year Number of cleaning times per year Net book value of equipment Number of workers per department Machine hours per year 580,000 43 500,000 84 £658,900 | £36,100 £446,200 18 15 6. 1,750 1,350 (i) Using the department data in the table above, allocate, apportion and reapportion these estimated costs to calculate a total estimated cost for the year for each of the manufacturing departments (i.e. packing and canning departments). (ii) Calculate an overhead absorption rate for each of the manufacturing departments, using a machine-hour rate.

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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