Q1 Beta Q Cost allocation with simultaneous equation
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School
Taylor's University**We aren't endorsed by this school
Course
ACCOUNTING 684
Subject
Accounting
Date
Dec 18, 2024
Pages
1
Uploaded by JusticeIceSeal78
MBC3253 INTRO MA&CTR DR.AS@UTS QUESTION 1Beta Company has three Production Departments, A, B and C, and two Service Departments, X and Y. The budgeted production overhead costs for a period allocated to the five departments were as follows: A B C X Y Allocated overheads ($) 190,000 200,000 130,000 60,000 40,000 In addition to the above, the following budget costs are apportioned to the five departments: Rent and rates $270,000 Depreciation of machinery $60,000 The following information is available relating to the five departments: A B C X Y Floor space (sq m) 150,000 100,000 125,000 25,000 50,000 Machinery value ($) 100,000 60,000 15,000 40,000 25,000 Usage of Department X 50% 30% 15% - 5% Usage of Department Y 35% 25% 30% 10% - Budgeted machine hours for the period were 120,000 for Department A, 100,000 for Department B and 80,000 for Department C. Actual results for the period were: A B C Actual overhead incurred ($) (allocated and apportioned) 435,000 357,750 225,200 Actual machine hours 135,000 115,000 78,000 Required: a) Produce a budgeted overhead distribution sheet for the period showing the allocated and apportioned costs for the five departments. (2 marks) b) Re-apportion the budgeted Service Department costs to the Production Departments using simultaneous equations. (Full marks will not be awarded for other methods used) (9 marks) c) Calculate a pre-determined overhead rate per machine hour for the period for each of three Production Departments (to 3 decimal places of $). (3 marks) d) Calculate the over / under absorbed for each of the Production Departments. (6 marks) (Total 20 marks)
