Question

In: Accounting

Seeb Hospital provides the following information for the year of 2018. Dept. E Dept. F Dept....

Seeb Hospital provides the following information for the year of 2018.

Dept. E Dept. F Dept. G Dept. H

Budgeted Hours

10,000 8,000 21,000 1,000

Actual Hours

12,000 8,000 22,0 1,200

Yearly maintenance hours

40,000

Allocation Rate

Budgeted maintenance hours

Maintenance costs: Fixed

OMR5,400,000 yearly

Variable OMR30 per maintenance hour

(9 Marks

(0)

Calculate the amount of maintenance cost budgeted for each department assuming

a single-rate cost-allocation method was used

Solutions

Expert Solution

COMPUATATION OF BUDETED FIXED OVERHEAD RATE
NUMERATOR DENOMINATOR = RESULT
TOTAL BUDGETED COST MAINTENANCE HOURS = FIXED OVERHEAD RATE
OMR                        5,400,000.00 40000 =                                             135.00
COMPUTATION OF MAINTENANCE COST BUDGETED FOR EACH DEPARTMENT
DEPT E DEPT F DEPT G DEPT H
OVERHEAD OVERHEAD RATE MAINTENANCE HOURS OVERHEAD COST OVERHEAD RATE MAINTENANCE HOURS OVERHEAD COST OVERHEAD RATE MAINTENANCE HOURS OVERHEAD COST OVERHEAD RATE MAINTENANCE HOURS OVERHEAD COST
OMR OMR OMR OMR
VARIABLE COSTS 30 10000              300,000.00 30 8000             240,000.00 30 21000                          630,000.00 30 1000                            30,000.00
FIXED COSTS 135 10000          1,350,000.00 135 8000          1,080,000.00 135 21000                      2,835,000.00 135 1000                          135,000.00
TOTAL MAINTENANCE COST          1,650,000.00          1,320,000.00                      3,465,000.00                          165,000.00

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