Question
Casual sports limited has two production departments which are Machining and Assembling and one maintenance service department. The below-budgeted estimates are for year 1. Particulars
Casual sports limited has two production departments which are Machining and Assembling and one maintenance service department. The below-budgeted estimates are for year 1.
Particulars Machining Assembly Maintenance Total
No of employees 160 120 120 400
Floor Area (Sq/mtr) 7,000 5,000 4,000 16,000
Power (Kilowatt hours) 70,000 52,500 17,500 140,000
Direct Machine Hours 14,000 400 - 14,400
Direct Labor hours 1,000 6,000 - 7,000
Information:
Indirect material $300 $268 $320 $888
Indirect wages $2,720 $1,480 $860 $5,060
Value of machinery $52,000 $48,000 $100,000
Below are annual budgeted overheads in USD ($)
Rent 12,800
Machine depreciation 10,000
Power 7,200
Supervision of employees 6,400
Indirect material 888
Indirect Labor 5,060
Total overheads 42,348
Required:
- Prepare overhead allocation sheet and reapportion maintenance department cost to the two production departments on the basis of the value of machinery.
- Calculate overheads absorption rates for each production department based on machine hours for the Machining Department and direct labour hours for the Assembling department.
- Make a job order cost sheet for Job no 001 and calculate the selling price if the profit margin is 20% of the selling price. Consider the below information.
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