ACMA Unit 6 – Overheads

Problem 1
The modern company is divided in to four departments. The actual costs for a period are as
follows.
Expenses Rs Expenses Rs
Rent 2,000 Supervision 3,000
Maintenance 1200 Fire insurance in respect of stock 1000
Depreciation on plant 900 Energy 1800
Employer’s liability for PF 300 Lighting 200

The following expenses are available in respect of the 4 departments

Particulars A B C D
Area (Sq.meters) 150 110 90 50
Number of employees 24 16 12 8
Total Direct wages (Rs.) 8,000 6,000 4,000 2,000
Value of plant (Rs.) 24,000 18,000 12,000 6,000
Value of stock (Rs.) 15,000 9,000 6,000 -

Apportion the costs to the various departments on the most equitable method

Problem 2
Problem 3
Problem 4
In an engineering factory, the following particulars have been extracted for the year
ended 31-12-2017. Compute the departmental overhead rate for each of the production
departments, assuming the overheads are recovered as a percentage of direct wages.

Production Depts. Service Depts.

Particulars
A B C X Y
Direct wages(Rs.) 30,000 45,000 60,000 15,000 30,000
Direct material (Rs.) 15,000 30,000 30,000 22,000 22,500
Staff number 1,500 2,250 2,250 750 150
Electricity kwh 6,000 4,500 3,000 1,500 1,500
Asset value(Rs.) 60,000 40,000 30,000 10,000 10,000
Light points 10 16 4 6 4
Area (Sq.meters) 150 250 50 50 50
The expenses for the period were:
Rs. Rs.
Power 1,100 Depreciation 30,000
Lighting 200 Repairs 6,000
Stores overhead 800 General overheads 12,000
Welfare to staff 3,000 Rent & taxes 550
Apportionment the expenses of service dept. Y according to direct wages and those of service dept.
X in the ratio of 5:3:2 to the production departments.

Problem 5
Problem 6