Matt limited has two production, departments, machine department and assembly department. There are two service departments,...

Matt limited has two production, departments, machine department and assembly department. There are two service departments, stores and maintenance. The budgeted overheads of each department along with overheads that have yet to be apportioned are listed below, along with details which can be used for appointment.

Total Machine Dept Assembly Dept Stores Maintenance

K’000 K’000 K’000 K’000 K’000

Indirect labour 1 125 000 400 000 650 000 40 000 35 000

Indirect material 310 000 160 000 120 000 10 000 20 000

Insurance and depreciation on buildings 100 000

Cleaning 25 000

Machinery Depreciation And insurance 1 500 000

Supervision of Production 70 000

Power 250 000

Heat and light 20 000

Total 3,400,000

Additional information Area occupied (m2) 6 000 3 000 800 200

% of power usage 25% 45% 20% 10%

Supervisor hours 15 20 - -

Value of machinery K’000 600 380 - 20

% use of stores department 40% 60% - -

% use of maintenance 40% 50% 10% -

Direct labour hours 200 000 500 000 - -

Machine hours 400 000 100 000 - -

Required: (i) Prepare an overhead analysis sheet

(ii) Compute overhead absorption rate for the two producing departments

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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