In: Accounting
Question 1
AKWASI produces a specialized product CESAR. The product passes through three (3) cost centers namely: machining, assembly and painting shop. Data relating to the cost centers is as below:
Machinin g |
Assembly |
Painting shop |
Engineering shop |
Stores |
|
Number of employees |
81 |
51 |
39 |
30 |
24 |
Engineering shop-- service |
18,000 |
12,000 |
10,000 |
- |
- |
Stores (orders) |
180 |
135 |
90 |
45 |
- |
At a management meeting dated 24th September 20X0, the following overheads were budgeted for the production and service cost centers exclusively for the ensuing period:
Cost centers |
GHS 000 |
Machining |
180,000 |
Assembly |
160,000 |
Painting shop |
130,000 |
Engineering shop |
84,000 |
Stores |
52,000 |
Canteen |
75,000 |
Equally, the following budgeted data relates to the production cost centers:
Machining |
Assembly |
Painting shop |
|
Machine hours |
9,200 |
8,100 |
6,600 |
Labor hours |
8,300 |
11,250 |
9,000 |
Labor cost (GHS) |
40,000 |
88,000 |
45,000 |
Actual results for the production cost centers were:
Machining |
Assembly |
Painting shop |
|
Machine hours |
10,000 |
8,200 |
6,600 |
Labor hours |
4,500 |
7,800 |
6,900 |
Labor cost (GHS) |
25,000 |
42,000 |
35,000 |
Actual overheads (GHS) |
290,000 |
167,000 |
155,000 |
Required:
Machining - Machine hours.
Assembly - Labor hours.
Paint shop - Labor costs.
under review.
PLEASE SHOW WORKING!!!......
Cost Centers | Hours/Cost | predetermined overhead absorption rates | |
Machining | 180,000.00 | 9,200.00 | 19.57 |
Assembly | 160,000.00 | 11,250.00 | 14.22 |
Painting Shop | 130,000.00 | 45,000.00 | 2.89 |
Cost Centers | Actual Hours/Cost | predetermined overhead absorption rates | Applied | Actual Results | Amount | |
Machining | 10,000.00 | 19.57 | 195,700.00 | 290000 | 94,300.00 | UnderApplied |
Assembly | 7,800.00 | 14.22 | 110,916.00 | 167000 | 56,084.00 | UnderApplied |
Painting Shop | 35,000.00 | 2.89 | 101,150.00 | 155000 | 53,850.00 | UnderApplied |