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Need Help F2 – Question taken from Dec 2001 paper

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Need Help F2 – Question taken from Dec 2001 paper

  • This topic has 0 replies, 1 voice, and was last updated 13 years ago by lendora.
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  • April 9, 2012 at 1:26 am #52158
    lendora
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    • Topics: 1
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    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)

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