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Chapter 7 : Accouting for overheads : Algebraic method

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Chapter 7 : Accouting for overheads : Algebraic method

  • This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.
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  • Author
    Posts
  • February 28, 2014 at 9:14 am #161067
    Umaima
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    in the example 6 of this chapter, i am having difficulty in reapportioning service department costs to production departments using Algebraic method.

    in the workings shown in example 6 , i could not identify how we can get 0.97S…

    the workings are shown like this

    stores : S= 20,000+0.15M (1)
    Maintenance = 15,000+0.20S (2)

    replace M in (1) :S = 20000+2250+ 0.03S
    0.97S = 22,250
    S = 22,250 /0.97

    February 28, 2014 at 1:24 pm #161088
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    Is you subtract 0.03S from both sides, then 1S – 0.97S = 0.03S

    If you watch my lecture you will see that I do go through the workings slowly, step by step.

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