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I need assistance with the calculation of overhead apportionment. I’m using BPP F5 study text. On page 7 of the text book there is a question relating to “more cost apportionment” however i seem not to get to the same calculations relating to rent and rates, building insurance and heat and light. The basis of apportionment relates to “Area”. I think they have used the Area sq (ft) to calculate these costs but I’m not getting to the right answer.
Please kindly assistI am sorry but I do not have the BPP Study Text – only the Revision Kit.
The apportioning of overheads is extremely unlikely to be asked in Paper F5 because it is examined in Paper F2.
If you do want more then I suggest that you watch my Paper F2 free lectures on cost allocation, apportionment and absorption, where I work through examples similar to the one you describe.
Our lectures for Paper F5 are a complete free course for F5 and cover everything needed to be able to pass the exam well. The only book you then really need to use is a Revision Kit because they contain lots of exam standard questions, and practice is vital.
THE TOTAL AMOUNT is 45000 $ at AREA (sq ft)
for shop A… calculation will be (10000/45000) * 16700= 3711
for shop B (12000/45000) * 16700= 4453
for Assembly (15000/45000) * 16700=5567
for canteen (6000/45000) * 16700=2227
for shop maintenance (2000/45000) * 16700= 742
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