Question
GHS GHS GHS GHS Indirect materials 35 150 - 25 Maintenance wages 160 250 300 325 Other overheads as follows: GHS Supervision 1500 Power 1800
GHS GHS GHS GHS Indirect materials 35 150 - 25 Maintenance wages 160 250 300 325 Other overheads as follows: GHS Supervision 1500 Power 1800 Rent 300 Repairs of plants 1200 Depreciation of plants 850 Depreciation of building 720 The following information is available in respect of the departments: A B HR Repairs Area occupied in square feet 1500 1100 900 500 Number of employees 20 15 10 5 Value of plant 6000 4500 3000 1500 HZ Power 10000 9000 6000 5000 Required i) Prepare an overhead analysis sheet by the most reasonable approach and estimate the overhead cost incurred in each cost center (6marks) ii) Department A & B are production departments whereas HR & Repairs are there to service these production departments. Assume these two service departments do not render any service to each other. Using equitable and fair as appropriate as possible re-apportion the HR & Repairs overheads to the production departments (4marks) (Total 15marks)
a) Explain the term overhead allocation Overhead apportivement and overhead absception 3marks hjaan Gampany Limited is divided into four (4) comes That is AB, padation departments and Human Resource & Repairs a service departments The actual cosa period is as follows A Repuis GHS GHS GHS CHS 150 35 Indirect maleri Maintenance ages 25 325 160 250 300 Other wwerhaal as wow! GHS 1500 1800 300 Powe Rent Kepaks of plants Depreciation of planes Darentiation of hilling 1200 720 HR Repairs 500 9000 The following informatie is available in respect of the departments: A B Area occupied in square feet Number of employees 20 15 Vahepe 6000 300 HZ Power 9000 10 5 1:90 600 Required Prepare an overhead analysis sheet by the most reasonable approach and estimate the coincumd in cache en 1 Department A & Bare production departments whereas HR & Repairs are there to Service se production departments. Assume lase la service de prima done render any service to each other. Using equitable and fair as appropriate as possible Terapportion the HR & Repsoverheads to the production departments (marks TemarksStep by Step Solution
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