Aggra Ltd. Has completed the initial allocation and apportionment of its budgeted overheads for next year, to its production and service departments.
The following totals are shown below:
Production Departments
Machining 28,000
Finishing 16,000
Service Departments
Stores 4,000
Maintenance 8,000
Canteen 6,000
The stores, maintenance and canteen are service departments.
The re-apportionment of service department overheads has not been done. Neither has the calculation of overhead absorption rates.
The following additional budget information is available as a basis for undertaking these tasks:
Number of Employees:
Machining 40
Finishing 10
Stores 5
Maintenance 5
Canteen 5
Maintenance Hours
Machining 500
Finishing 300
Material Requisitions
Machining 300
Finishing 200
Machine Hours
Machining 20,000
Labor Hours
Finishing 4,000
a) Re-apportion the service departments' overhead to the production departments using appropriate bases. (11 marks)
b) Calculate the overhead absorption rates for the two production departments for the next year. (4 marks)
The following totals are shown below:
Production Departments
Machining 28,000
Finishing 16,000
Service Departments
Stores 4,000
Maintenance 8,000
Canteen 6,000
The stores, maintenance and canteen are service departments.
The re-apportionment of service department overheads has not been done. Neither has the calculation of overhead absorption rates.
The following additional budget information is available as a basis for undertaking these tasks:
Number of Employees:
Machining 40
Finishing 10
Stores 5
Maintenance 5
Canteen 5
Maintenance Hours
Machining 500
Finishing 300
Material Requisitions
Machining 300
Finishing 200
Machine Hours
Machining 20,000
Labor Hours
Finishing 4,000
a) Re-apportion the service departments' overhead to the production departments using appropriate bases. (11 marks)
b) Calculate the overhead absorption rates for the two production departments for the next year. (4 marks)