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Gokool says

First of all, ur lectures are really helpful… u explain the concepts so well

My problem is that when u do the algebraic method(for e.g in Q6 in ur lecture), after calculating S and M through algebra and apportioning it to production dept 1(60% and 75% respectively), what do we do with the remaining 5%?

in my head its like 5% of the overheads are ignored and NOT apportioned..is there any way in which the 5% should be apportioned?

John Moffat says

Its not the easiest thing to explain by typing

If you calculate the remaining percentage for each of the two service departments, then you will find that they both come to exactly the same amount, and effectively ‘cancel each other out’.

Also, if you do repeated apportionment (instead of using the algebra) then you end up with exactly the same answer, which in a sense ‘proves’ that the algebra does work

zebbo says

i still dont understand how u got the 0.97

John Moffat says

Have you looked at the answer at the back of the Course Notes?

1 – 0.03 = 0.97

Omari says

How did you subtract from both side sorry I couldn’t get it

John Moffat says

I subtracted the same figure from both sides of the equation.

Its a bit difficult to be able to say more here. All I can suggest is that you either watch the lecture again, or work through the answer at the back of the course notes.

Abdullah says

is algebraic method required in CBE ?

Abdullah says

also i didn’t understand how did you get this value 0.97s @4:50

John Moffat says

I make it clear in the lecture that you can do it either way – they will both give the same answer. Do it whichever way you find easiest and quickest.

For the 0.97S, I subtract 0.03S from both sides. (S – 0.03S = 0.97S)

(Remember that the answers are also at the end of the Course Notes)

michellesp says

thank you

michellesp says

Can someone please explain #5 in the test question for me please.

John Moffat says

If you look below, you will find the answer to question 5 explained (4 or 5 posts further down this page)

Mahrukh says

Salam tutor,

I wanted to know if hours are given instead of percentage as the basis of apportionment, would the algebric method still be applicable??

John Moffat says

Yes, but the algebraic approach is only relevant if two service departments are doing work for each other.

Ihuoma says

Hello

Please I do not know how you got 0.97s= 22250

Please help me

thank you

gabriele says

Can you give me the details for the questions 4-5? Thanks

John Moffat says

4:

The total overheads for centre X are $88,000.

The total hours worked in X are (8,000 x 3.0) + (8,000 x 2.5) = 44,000 hours.

So the absorption rate for X is 88,000/44,000 = $2 per hour.

You can do the same for Y and calculate the absorption rate for centre Y per hour.

To get the cost per unit of M, it is 2.5 hours at $2 per hour, plus 2.0 hours at the absorption rate for centre Y.

5:

Since labour is paid $8 per hour, they are working 400/8 = 50 hours.

So the total cost is the total of materials (300), plus the labour (400) plus production overheads (50 hours at $26 per hour) plus non-production overheads (120% x (300 + 400)).

Yanique says

what is the correct answer for Question 4?

John Moffat says

The answers are at the back of the Course Notes.