Q.2 Noble Industries Limited has two production departments and two service departments. Information regarding its factory...

 

Transcribed Image Text:

Q.2 Noble Industries Limited has two production departments and two service departments. Information regarding its factory overheads for the latest quarter and related details are as follows: Production Departments Service Departments Total A B X Y Direct factory overheads Rs. in '000 105,000 85,000 30,000 20,000 240,000 Machine hours 1,890 1,710 3,600 Floor area Square yards 1,200 1,050 250 150 2,650 Basis of allocation - Department X 50% 40% 10% 100% Basis of allocation - Department Y 45% 40% 15% 100% In addition to direct overheads, there were common overheads of production and service departments, which amounted to Rs. 53 million. Required: Compute the factory overhead rate for the production departments based on machine hours using the repeated distribution method. (07) Q.2 Noble Industries Limited has two production departments and two service departments. Information regarding its factory overheads for the latest quarter and related details are as follows: Production Departments Service Departments Total A B X Y Direct factory overheads Rs. in '000 105,000 85,000 30,000 20,000 240,000 Machine hours 1,890 1,710 3,600 Floor area Square yards 1,200 1,050 250 150 2,650 Basis of allocation - Department X 50% 40% 10% 100% Basis of allocation - Department Y 45% 40% 15% 100% In addition to direct overheads, there were common overheads of production and service departments, which amounted to Rs. 53 million. Required: Compute the factory overhead rate for the production departments based on machine hours using the repeated distribution method. (07)

Answer rating: 100% (QA)

The factory overhead rate for Department X is Rs 6957672 per machine hour and for Department Y is Rs ... View the full answer