2. Cost and management accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 903 questions
Aluko Limited manufactures three products for the automobile industry, BS100, BS200 and BS300. The business is divided into four departments – machining, assembly, stores and canteen. The following information is available for one unit of the three products. BS100 BS200 BS300 Direct materials $12.60 $14.10 $18.80 Direct labour hours – machining ($7.80 per hour) 30 minutes 50 minutes 55 minutes Direct labour hours – assembly ($6.30 per hour) 10 minutes 12 minutes 15 minutes Machine hours – machining 20 minutes 30 minutes 30 minutes Machine hours – assembly 5 minutes 5 minutes 10 minutes The total estimated overhead costs for the year ended 30 June 2015 are as follows: $ Indirect wages 232 000 Machinery maintenance 94 000 Machinery insurance 9 020 Rent and rates 49 600 Buildings insurance 12 800 Machinery depreciation 26 600 The following information is also available. Machining Assembly Stores Canteen Number of indirect employees Floor area (sq metres) 8 000 9 000 2 000 1 000 Value of machinery ($000) Number of orders from stores 6 300 1 300 Budgeted labour hours 7 720 28 600 Budgeted machine hours 46 400 3 200 Use of canteen 30% 55% 15% REQUIRED Apportion the costs to the four departments and re-apportion the service departments’ costs to production departments using a suitable basis. Total $ Machining $ Assembly $ Stores $ Canteen $ Indirect wages Machinery maintenance Machinery insurance Rent and rates Buildings insurance Machinery depreciation Reapportionment of canteen Reapportionment of stores Calculate appropriate absorption rates for each production department correct to two decimal places. Additional information The actual results for the year were as follows: Machining Assembly Factory overheads $239 110 $192 860 Direct labour hours 8 420 28 150 Direct machine hours 49 120 3 050 REQUIRED Calculate the under or over absorption of overheads for each production department. Machining $ Assembly $ Explain the reason for the over or under absorption of overheads calculated for each production department in part . Additional information Aluko Limited has been asked to prepare a quotation for a customer requiring 250 units of BS200. The company requires a 35% gross profit on each order. REQUIRED Calculate the quoted selling price. $ Explain the following terms in relation to overheads. 1 Allocation 2 Apportionment 3 Absorption
9706_w14_qp_22
THEORY
2014
Paper 2, Variant 2
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Questions Discovered
903