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WINSEM2021-22 CCA2707 TH VL2021220501052 Reference Material I 21-03-2022 1 Overheads
WINSEM2021-22 CCA2707 TH VL2021220501052 Reference Material I 21-03-2022 1 Overheads
WINSEM2021-22 CCA2707 TH VL2021220501052 Reference Material I 21-03-2022 1 Overheads
According to Whelden
Manufacturing Overhead
Administration Overhead
Selling Overhead
Distribution Overhead
Fixed
Overheads Variable
Overheads
Semi variable
Overheads
ELEMENT WISE CLASSIFICATION
Indirect Material
Indirect Labour
Indirect Expenses
Control WISE CLASSIFICATION
Controllable
Cost
Uncontrollable
cost
Normality WISE CLASSIFICATION
Normal Overheads
Abnormal Overheads
PRIMARY
DISTRIBUTION
OF OVERHEADS
PRIMARY DISTRIBUTION
ENT
A B C D
Rent Area (Sq. Ft) 15:11:9:5 4,000 1500 1100 900 500
Repairs Value of Plant 4:3:2:1 2,400 960 720 480 240
Depreciation Value of Plant 4:3:2:1 1,350 540 405 270 135
Lighting Area (Sq. Ft) 15:11:9:5 300 112.5 82.5 67.5 37.5
Insurance of Value of stock 5:3:2
1,500 750 450 300 -
stock
Production Service
Basis of
Expenses Ratio Amount Dept Dept
Apportionment
A B C D E
Rent Area Occupied 4:5:6:4:1 2000 2500 3000 2000 500
10,000
Depreciation Value of Machine 12:16:20:1:1 20,000 4800 6400 8000 400 400
for Machine
Motive Horse Power 6:3:5:1:- 1200 600 1000 200 -
Power (K.W.H) 3000
A B C D
Rent Area (Sq. Meters) 15:11:9:5 1000 375 275 225 125
Wages 2000
SIMULTANEOUS
REPEATED
EQUATION
DISTRIBUTION
METHOD
METHOD
DIRECT
REAPPORTIONMENT
METHOD
Secondary overhead distribution summary {Pg.No: 5.88; Sum :10}
x = 1,25,944.58
y = 1,18,891.6
Secondary Distribution Overhead
Particulars Total Production Department
A B C
Overhead as per 17,50,000 6,50,000 6,00,000 5,00,000
Primary Distribution
Service Department ‘X’ O/H
(85%)
1,25,944.58 x85%
1,07,052.89
30%, 40% & 15% 37,783 50,378 18,892
Service depat.’Y’.O.H (95% )
1,18,891.6 x 95%
1,12,947.02
40%, 30% 25% 47,557 35,667 29,723
Total 7,35,340 6,86,045 5,48,615
Sum no 18; Pg.No: 5.92
X = 234000 + 0.2Y X 10
Y = 300000 + 0.1x X10
10x = 23,40,000 + 2y ------(1)
10y = 30,00,000 + 1x ------ (2)
multiply equation 1 with 5
10x = 23,40,000 + 2y X 5
50x = 1,17,00,000 +10y ------- (3)
10y = 30,00,000 +1x
rearrange the formula
50x -10y = 1,17,00,000
-1x +10y = 30,00,000
----------------------------
49x = 1,47,00,000
x = 1,47,00,000
------------- X = 3,00,000
49
substitute the value of X in equation 1
10x = 23,40,000 + 2y
10 (3,00,000) = 23,40,000 +2y
30,00,000 - 23,40,000 = 2y
6,60,000 = 2y
y = 6,60,000
__________ Y = 3,30,000
2
Secondary Distribution Overhead
Particulars Total Production
Department
A B C
Overhead as per 20,00,000 800000 700000 500000
Primary Distribution
Service Department ‘X’ 2,70,000 60000 120000 90000
O/H
90% 300000X90%
270000 (2:4:3)
Service dept.’Y’. O.H 2,64,000 132000 66000 66000
80% - 330000X80%
264000 (4:2:2)
1990 X = 20603.01
5 Y = 12060.2
Secondary Distribution Summary
Total
169981.98 86533 49196 34271
REPEATED DISTRIBUTION METHOD
Sum no: 21; Pg.No: 5.94
Secondary Overhead Distribution Summary
Particulars Production Department Service Department
A B C X Y
Department Overhead as per
Primary Distribution 6300 7400 2800 4500 2000
Dept. X Overhead
Distributed in the ratio 4:3:2:1 1800 1350 900 (-4500) 450
Dept. Y Overhead
Distributed in the ratio 3:3:2:2 735 735 490 490 (-2450)
Dept. X Overhead
Distributed in the ratio 4:3:2:1 196 147 98 (-490) 49
Dept. Y Overhead
Distributed in the ratio 3:3:2:2 14.7 14.7 9.8 9.8 (-49)
Dept. X Overhead
Distributed in the ratio 4:3:2:1 3.92 2.94 1.96 (-9.8) 0.98
Total 9050 9650 4300
Sum no: 22; Pg.No: 5.94
Secondary Overhead Distribution Summary
Particulars Production Department Service Department
A B C X Y
Department Overhead as per
Primary Distribution 6000 5500 4500 2100 2700
Dept. X Overhead
Distributed in the ratio 2:4:3:1 420 840 630 (-2100) 210
Dept. Y Overhead
Distributed in the ratio 4:2:2:2 1164 582 582 582 (-2910)
Dept. X Overhead
Distributed in the ratio 2:4:3:1 116.4 232.8 174.6 (-582) 58.2
Dept. Y Overhead
Distributed in the ratio 4:2:2:2 23.28 11.64 11.64 11.64 (-58.2)
Dept. X Overhead
Distributed in the ratio 2:4:3:1 2.33 4.66 3.49 (-11.64) 1.16
TOTAL 7726 7171 5902
TRIAL & ERROR METHOD
Sum No: 26; Pg.No 5.97
Statement showing Total Overheads of Service Department
Particulars Service Department
Y
X
Overhead as per Primary Distribution 12,000 10,000
Share of Y in X’s O/H (12000X20%) (-2400) 2400
Share of X in Y’s O/H (12400X 10%) 1240 (-1240)
Share of Y in X’s O/H (1240 X 20%) (-248) 248
Share of X in Y’s O/H (248 X 10%) 24.8 (-24.8)
Share of Y in X’s O/H (24.8 X 20%) (-4.96) 4.96
TOTAL 13265 12653
Secondary Overhead distribution Summary
A B X Y
4. Labour Hour Rate= Factory O/H 5. Machine Hour Rate= Factory O/H
Labour Hours Machine Hours
Comparative Statement
Particulars Dir. Labour Hr Particulars Labour Cost
Direct Material 42 Direct Materials 42
Direct Labour 45 Direct Labour 45
Prime Cost 87 Prime Cost 87
Direct Labour Hour 12.9 Direct Labour Cost 26.69
0.43(30 X 0.43) 45 X 59.3/100
99.90 113.69