Intermediate: Overhead analysis sheet and calculation of overhead rates A company is preparing its production overhead budgets
Question:
Intermediate: Overhead analysis sheet and calculation of overhead rates A company is preparing its production overhead budgets and determining the apportionment of these overheads to products.
Cost centre expenses and related information have been budgeted as follows:
Required:
(a) Determine budgeted overhead absorption rates for each of the production departments using bases of apportionment and absorption which you consider most appropriate from the information provided.
(b) On the assumption that actual activity was:
and total production overhead expenditure was £176 533, prepare the production overhead control account for the year (you are to assume that the company has a separate cost accounting system).
(c) Explain the meaning of the word 'control' in the title of the account prepared in answer to (b).
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