12:07 O Potill Question 3 Mickel Ltd is a company that manufactures machine parts. The company has three (3) Production Departments and one (1) Service Department. The following information is for the year ended 31 December 2014. Dept. A S 4 000 Dept. B $ 6 6 000 Dept. c $ 9 150 Service $ S 3350 Total $ 225 000 Indirect Wages Other Cost Storekeeping Rent Light and heat Power Depreciation Insurance: Plant 16 000 10 500 7 000 18 000 40 000 1 000 340 000 Dept. c Service You ascertain the following information: Dept. A A Dept. B Area (m) 7500 11 250 Book Value of Plant $70 000 $90 000 No. of store requisitions 90 60 Effective Horse Power 40 50 Direct Labour Hours 50 000 40 000 Direct Labour Cost $25 000 $30 000 Machine Hours 35 000 45 000 6 250 $35 000 10 000 $ 5000 50 5 110 000 S 45 000 5 000 10 -- Required: Analyse the above indirect costs between the departments showing the bases of apportionment you have used. (13 marks) b. Re-apportion the costs of the Service Department over the three (3) Production Departments using appropriate bases. (6 marks) c. Calculate an Overhead Absorption Rate (CAR) for the production departments based on direct labour cost. (6 marks) (Total 25 marks) The Council of Community Colleges of Jamaica Page 10 ACCT2401 Question 4 Mixwell Ltd received an order for 600 bottles of champagne. The units were manufactured as Job #525 and passed through three cost centres. Mixing, Bottling and Packing whose overhead absorption rates are as follows: Mixing Bottling Packing $80 per machine hour $36 per labour hour $48 per man hour The following production costs and data were recorded: Direct Materials Labour: Mixing Bottling Packing $2 520 160 hours @ $22.00 per hour 280 hours @ $16.00 per hour 120 hours @ $18.00 per hour 80 hine hours were recorded in Mixing, and General and Administration overheads are absorbed at 20% of production cost. Profit is calculated at 40% mark-up. Required: a Calculate the total cost and selling price for job #525 showing a summarized job card. (20 marks) (5 marks) Prepare the job account for job #525. b. (Total 25 marks) III O O