Question one Mwachisompola Limited is a company that manufactures building equipment. It has three production departments and a service department and had produced the following budgeted cost of production for the year ended 31 March: Production cost 450,000 Indirect wages Direct materials Carriage in wards Direct wages Dept X Dept Y Dept Z Consumable stores 45,000 240.000 10,000 200,000 8.000 12,000 18,000 32,000 21,000 14,000 36,000 80,000 ,000 Other costs Rent Light and heat Power Depreciation-plant Insurance 2 185,000 The following is set of data relating to the physical and performance aspects of the company: Service 12,500 70.000 5 Department Area (m) Book value of plant Stores requisitions Effective horse power Direct labour hours Direct labour cost Machine hours 15,000 140,000 180 80 100.000 50,000 70,000 Y 22,500 180,000 120 100 80.000 60.000 90.000 Z 20,000 10,000 100 5 220,000 90,000 10,000 15 Note: The general service department is apportioned to the production department on the basis of direct labour cost Required: a) Prepare an overhead analysis sheet for the departments, showing clearly the basis of apportionment (8 marks) b) A computation (correct to three decimal places) of hourly cost rates of overhead absorption for each production department using the performance data given (4 marks) c) Kabwe Ltd assemblies a product (Total) from various components. Using three operative staff (Lusaka, Choma, Kalabo), each working a 4o week. The company pays overtime at time and half and a bonus of 75% of time saved at normal hourly rate. The data below relates to Kabwe Ltd operations in week 10 Operative staff Lusaka Choma Kalabo Total output units 530 600 490 Total hours worked 60 hours 45 hours 48 hours Wage rate per hour K18 K20 K15 The standard time allowed per unit is 6 minutes irrespective of the operative staff Required a) Calculate the total pay for each of the employees in week 10 showing clearly the bonus, overtime premium and basic wage figures (4 marks) b) Kabwe Lid management wishes to adopt a piece work scheme to increase the weekly output. State two advantages and two disadvantages of implementing a piece work scheme to Kabwe Lid (4 marks) Question one Mwachisompola Limited is a company that manufactures building equipment. It has three production departments and a service department and had produced the following budgeted cost of production for the year ended 31 March: Production cost 450,000 Indirect wages Direct materials Carriage in wards Direct wages Dept X Dept Y Dept Z Consumable stores 45,000 240.000 10,000 200,000 8.000 12,000 18,000 32,000 21,000 14,000 36,000 80,000 ,000 Other costs Rent Light and heat Power Depreciation-plant Insurance 2 185,000 The following is set of data relating to the physical and performance aspects of the company: Service 12,500 70.000 5 Department Area (m) Book value of plant Stores requisitions Effective horse power Direct labour hours Direct labour cost Machine hours 15,000 140,000 180 80 100.000 50,000 70,000 Y 22,500 180,000 120 100 80.000 60.000 90.000 Z 20,000 10,000 100 5 220,000 90,000 10,000 15 Note: The general service department is apportioned to the production department on the basis of direct labour cost Required: a) Prepare an overhead analysis sheet for the departments, showing clearly the basis of apportionment (8 marks) b) A computation (correct to three decimal places) of hourly cost rates of overhead absorption for each production department using the performance data given (4 marks) c) Kabwe Ltd assemblies a product (Total) from various components. Using three operative staff (Lusaka, Choma, Kalabo), each working a 4o week. The company pays overtime at time and half and a bonus of 75% of time saved at normal hourly rate. The data below relates to Kabwe Ltd operations in week 10 Operative staff Lusaka Choma Kalabo Total output units 530 600 490 Total hours worked 60 hours 45 hours 48 hours Wage rate per hour K18 K20 K15 The standard time allowed per unit is 6 minutes irrespective of the operative staff Required a) Calculate the total pay for each of the employees in week 10 showing clearly the bonus, overtime premium and basic wage figures (4 marks) b) Kabwe Lid management wishes to adopt a piece work scheme to increase the weekly output. State two advantages and two disadvantages of implementing a piece work scheme to Kabwe Lid (4 marks)