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November 20, 2015 at 10:17 pm
Could you please tell me know how can we deal with if there are more than two service cost center need reapportion to production cost center, because in example 6 we are only have two service cost center.
in real life, i think that there are more than two service cost centre need reapportion to production section, and i don’t know how to treat them correctly, and whether the reciprocal method is approciate in these case.
I am very appreciated if you can give me an example to illustration my trouble.
Thanks and best Regards to my respect teacher
John Moffat says
November 21, 2015 at 9:18 am
In real life certainly there could be more than 2 service centres.
However it is very unlikely in the exam (and if there were you would certainly not be expected to use the algebraic method).
If it were to happen then you would do it in exactly the same way as we do the step by step method with 2 service centres. However, again, it does not happen in the exam that 3 centres all are used by each other.
November 22, 2015 at 6:20 am
thank you Sir
October 25, 2015 at 7:28 pm
Sir do the working of question 5
October 25, 2015 at 7:48 pm
It would be nice if you were to say ‘please’!!!
Materials are 300.
Labour is 400 (which means 400/8 = 50 hours)
Direct overheads are 50 hours x $26 = 1300
Prime cost is 300 + 700 = 1,000
So non-production overheads are 120% x 700 = 840
The total comes to $2840
October 16, 2015 at 12:05 pm
Is there anything important said after 14:49 mins, because I can’t hear anything from there till the end of the lecture??
October 16, 2015 at 2:54 pm
I would guess so. You need to turn up the sound on your computer.
October 17, 2015 at 3:36 am
I did but I think there is something wrong with this uploaded lecture after 14:49. Could you please tell me the important bit here because I think there is nothing wrong at my end.
October 17, 2015 at 8:08 am
the tutor is not speaking later,
you are supposed to do those tests by yourself, and only check with the tutors workings…
October 18, 2015 at 4:21 pm
July 15, 2015 at 11:22 am
in question 6 we reaportion cost from service to production deptt on percentage base but if base given is number of employee then after using algebraic method we multiply it to no. of employee of particular deptt dividing total no of employee. the total no. of employee we take includes srvices deptt employee or not. say from above percentages as no of employee then reaportioning store to production deptt 1. we multiply the calculated store cost to 60 and divide by 90 instead of 100 as total base.
July 15, 2015 at 11:57 am
The object is to apportion all of the costs to the production departments.
The canteen is a service department (and the cost of employing people in the canteen is part of the total cost of the canteen). The canteen is there to feed the workers in the production departments and therefore the cost of the canteen should be apportioned on the basis of the number of production employees.
July 16, 2015 at 10:51 am
June 29, 2015 at 1:41 pm
Hi there on qn 6. where did you get 0.995
June 29, 2015 at 2:03 pm
S = 6300 + 423 + 0.005S
If you subtract 0.005S from both sides, then on the left hand side S – 0.005S = 0.995S
June 30, 2015 at 8:12 am
Thank you Sir.
October 18, 2015 at 6:22 pm
I am still not getting that figure.
Are you saying that the quation will be:
therefor S-0.005S = 6723
If that is correct so far, I am lost after that! please help.
October 18, 2015 at 10:55 pm
S – 0.005S = 0.995S as I wrote before.
So 0.995S = 6723.
So S = 6723/0.995
October 18, 2015 at 11:03 pm
What is the value of S in the quation S-0.005S?
October 18, 2015 at 11:45 pm
Try dividing 6723 by 0.995 and you will see the value!!!
This really is very basic arithmetic.
(and the answers are, as you will know, at the back of the lecture notes)
April 17, 2015 at 11:30 pm
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.
April 18, 2015 at 10:04 am
Both ways will give the same answer.
April 10, 2015 at 6:08 pm
sir,what is the answer for 5th question in test
April 11, 2015 at 8:53 am
The answer is C.
(All the answers are at the back of the free Lecture Notes – see the contents page)
February 9, 2015 at 1:00 pm
I didnt get the 0.15 x 0.20 at first but the penny has just dropped, and now I understand.
May I ask:
Would you be asked in any of the exams to do the algebraic version for recharging dept’s?
February 9, 2015 at 1:02 pm
No. In the exam, if reciprocal apportionment is asked then you will always be able to do it either way – whichever way you prefer.
February 11, 2015 at 9:45 am
Ok cheers for that John.
December 3, 2014 at 10:23 am
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
December 3, 2014 at 10:48 am
Have you looked at the answer at the back of the course notes?
December 3, 2014 at 10:55 am
Sir I have looked at the back of the course notes but still cannot understand
February 10, 2015 at 9:40 pm
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.
February 10, 2015 at 9:46 pm
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
September 5, 2015 at 2:25 pm
November 8, 2014 at 11:56 am
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.
November 8, 2014 at 1:27 pm
Have you looked at the answer at the back of the Course Noted? It sets out the steps.
October 19, 2014 at 3:28 pm
Thankyou for your lectures.i have a doubt in algebraic method
For eg: the last question 6
Where did this figure 0.995S come from??
rest everything is fine but could you please explain that bit.
October 19, 2014 at 3:37 pm
October 19, 2014 at 3:45 pm
September 28, 2014 at 4:23 pm
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?.
September 28, 2014 at 8:05 pm
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).
September 28, 2014 at 4:04 pm
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?
September 28, 2014 at 4:05 pm
Have a look at my answer to the question below – it is exactly the same approach
September 28, 2014 at 7:17 am
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
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?
September 28, 2014 at 8:41 am
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.
September 28, 2014 at 9:21 am
thank you sir.
September 28, 2014 at 9:40 am
You are welcome
September 21, 2014 at 8:45 pm
This was the great lecture…but some comments make me confused…
Your explanation is better than live…
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