# Accounting for overheads part d

1. says

Hello Sir

I tried both ways and they gave me almost the same answers. However i miss out on your lecture in terms of audio after 14.50min as i can not hear what you are explaining. please check.

Thanks.

• says

(All the answers are at the back of the free Lecture Notes – see the contents page)

2. says

I didnt get the 0.15 x 0.20 at first but the penny has just dropped, and now I understand.

Would you be asked in any of the exams to do the algebraic version for recharging dept’s?

• says

No. In the exam, if reciprocal apportionment is asked then you will always be able to do it either way – whichever way you prefer.

• says

Ok cheers for that John.

3. says

Hello sir John Moffat, I did not understand in algebraic method that how you got 0.03s & 0.97s.
Thanks for giving us free notes & lectures it really helps us

• says

Sir I have looked at the back of the course notes but still cannot understand

• says

I am also struggling with this part. I don’t understand how 0.03 becomes 0.97 and the value of S stays the same.

• says

It’s ok, I have it now! So…
S = 20,000 + 2,250 + 0.03S

Take 0.03 away from both sides so..
0.97S = 22,500

4. says

I still don’t understand where the 2250 comes from , can anyone please do the algebraic method of example 6 for me step by step,,,I am totally lost, I have watched this lecture so many times but it is still not clear.

5. says

Hello sir!
Thankyou for your lectures.i have a doubt in algebraic method
For eg: the last question 6
S=6300+0.05M
M=8450+0.10S

S=6300+0.05(8450+0.10S)
S=6300+423+0.005S
0.995S =6723
Where did this figure 0.995S come from??
rest everything is fine but could you please explain that bit.

6. says

Thank you so much. I became super clear..
I have last question)))
A company has a budgeted labor cost of 180 000 dollar for the production 30 000 units per month. Each unit is budgeted to take 3 hours of labor. The actual labour cost during the month was 160 000 dollar for 28 000 units and 85 000 hours were worked.
What is the labour efficiency variance?.

• says

Have you watched all the lectures? This question relates to the chapter and lecture on variance analysis, and so please do not post it under a lecture on accounting for overheads.

You should post the question in the F2 Ask the Tutor forum (after you have watched the lecture on variance analysis).

7. says

Hi John
Can u help me with this question? The answer is 8 (from mock exam). can not fih=gure out somehow. Thanks
A company produces 2 products P and Q that are both worked in 2 departments of 1 and 2.
Each unit of P spends 1 hour in department 1 and 2 hours in department 2
Each unit of Q spends 2 hours in department 1 and 2 hours in department 2
The total budgeted production of P is 5000 units and Q is 10 000 units.
The total budgeted overheads are 50 000 US dollar for department 1 and 90 000 US dollar for department 2
What is the overhead per unit of P?

8. says

Sir, could please explain the 4th test question of chapter 7,
it’s really confusing..
A company manufactures two products L and M in a factory divided into two cost centres, X and Y. The fol- lowing budgeted data are available: Cost centre X Y Allocated and apportioned fixed overhead
__________________________________X___________Y_______________________
costs____________________________\$88,000 \$96,000_____________________
Direct labour hours P.u: Product L___ 3·0________ 1·0___________________________
___________________Product M___2·5 _________2·0__________________________
Budgeted output is 8,000 units of each product. Fixed overhead costs are absorbed on a direct labour hour basis.
What is the budgeted fixed overhead cost per unit for Product M?

• says

First you have to calculate the absorption rate for each department separately.

For department X, the total overheads are \$88,000.
The total hours worked are 8,000 x 3.0 (for product L) and 8,000 x 2.5 (for product M). That comes to a total of 44,000 hours.
So for department X, the absorption rate is 88,000/44,0000 = \$2 per hour.

You can do the same exercise for department Y, and you should get \$4 per hour.

To get the cost for product M, it will be 2.5 hours in X at \$2 per hour, plus 2.0 hours in Y at \$4 per hour.

9. says

This was the great lecture…but some comments make me confused…

Your explanation is better than live…
Thanks alott…