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40.000 MACO1US Assignment Two Mange preparing overhead tutor a forthcoming period The company has three production departments. Add service departments, X and Y The following figures have been produced in N Y Overhead cost 40 000 42.000 42.000 Machine hours 16.000 12,000 13,000 Overhead is absorbed on a machine hour basis It has been estimated that service department usage is as follows: A X Y Department 20% 10 409 Department 30% 30% 20% 20% Required: (a) Define Overhead allocation: (4) Overhead apportionment. 30 (4 marks (b) Prepare a schedule of the overhead costs to be charged to departments A, B and C. using the repeated distribution method to apportion the service department costs to the production departments (Work to the nearest NS) (8 marks) (c) Calculate the overhead absorption rates for the period for departments A, B and C (Work to the nearest NS) (6 marks) (d) State why hourly rates are generally accepted to be the most appropriate method of overhead absorption, and comment upon other methods that may be used (5 marks) (e) State another method (other than repeated distribution) that could be used for the reapportionment of service department costs over production departments (2 marks) (Total 25 marks) Due Date: 16 September 2020 40.000 MACO1US Assignment Two Mange preparing overhead tutor a forthcoming period The company has three production departments. Add service departments, X and Y The following figures have been produced in N Y Overhead cost 40 000 42.000 42.000 Machine hours 16.000 12,000 13,000 Overhead is absorbed on a machine hour basis It has been estimated that service department usage is as follows: A X Y Department 20% 10 409 Department 30% 30% 20% 20% Required: (a) Define Overhead allocation: (4) Overhead apportionment. 30 (4 marks (b) Prepare a schedule of the overhead costs to be charged to departments A, B and C. using the repeated distribution method to apportion the service department costs to the production departments (Work to the nearest NS) (8 marks) (c) Calculate the overhead absorption rates for the period for departments A, B and C (Work to the nearest NS) (6 marks) (d) State why hourly rates are generally accepted to be the most appropriate method of overhead absorption, and comment upon other methods that may be used (5 marks) (e) State another method (other than repeated distribution) that could be used for the reapportionment of service department costs over production departments (2 marks) (Total 25 marks) Due Date: 16 September 2020

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