KOKO LTD operates five departments of which Department 1, 2 & 3 are production departments and Departments 4 and 5 being stores and maintenance departments respectively. The actual cost incurred for the year ended 31st December 2019 were:

GHS

820,000 340,000 540,000 210,000 440,000 500,000

DEPARTMENTS Assembling Finishing Stores 150,000 240,000 60,000

500,000 620,000 160,000 The following information is also available for the 5 departments.

Rent

Insurance of Building Power

Supervision

Machine Depreciation Light and Heat

Machining

Maintenance

100,000 200,000

Indirect Materials Indirect Wages

200,000 350,000

DEPARTMENTS

Machining Assembling Finishing Stores Maintenance

Area Occupied (sq.ft) Cost of machines (GHS) Horse Power

No. of Mat Requisition Maintenance Hours Direct Labour Hours Machine Working Hours

600 300 120000 80000 500 350

55 80

400 560 75000 300,000 380,000 101,000

150 60 90 40000 - 10000 1500 400 250

25 - -

40 - - 48,000 18,000 9,000 280,000 - 15,000

The company produces two products KB and KT, and the number of hours spent on the production of each unit of KB and GH are:

Machining: Direct Labour Hours Machine Hours

Assembling: Direct Labour Hours Machine Hours

Finishing: Direct Labour Hours Machine Hours

KB KT

105 50 200 180 200 155 55 40 60 80 205 156

1

Required:

a. Prepare the overheads analysis sheet showing the apportionment of overheads to the department and the re-distribution of the service departments overhead to the production departments. (14 marks)

b. Calculate for each production department the most appropriate overhead absorption rate given reasons for your choices. (3 marks)

c. Calculate the overheads chargeable to each unit of the products KB and KT produced.

(3 marks) (Total 20 marks)

please this has been takem care of already let us tackle the rest