A company has two production departments and two service departments. The data relating to a period are as under:
The power requirement of these departments are met by a power generation plant. The said plant incurred an expenditure, which is not included above, of `12,18,750 out of which a sum of `8,43,750 was variable and the rest fixed.
After apportionment of power generation plant costs to the four departments, the service department overheads are to be redistributed on the following bases:
You are required to:
(i) Apportion the power generation plant costs to the four departments.
(ii) Re-apportion service department cost to production departments.
(iii) Calculate the overhead rates per direct labour hour of production departments, given that the direct wage rates of PD1 and PD2 are `50 and `40 per hour respectively.
A company has two production departments and two service departments. The data relating to a period are as under: Production Departments Service Departments PD 1 PD 2 SD1 SD2 Direct Materials (`) 80,000 40,000 20,000 30,000 Direct Wages (`) 95,000 50,000 30,000 20,000 Overheads (`) 80,000 50,000 40,000 30,000 Power Requirement at Normal capacity operations (Kwh) 25,000 30,000 15,000 10,000 Answer to MTP_Intermediate_Syllabus 2016_Dec 2019_Set 1 DoS, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 5 Actual power consumption during the period (Kwh) 12,000 20,000 8,000 12,000 The power requirement of these departments is met by a power generation plant. The said plant incurred an expenditure, which is not included above, of ` 1,21,875 out of which a sum of ` 84,375 was variable and the rest fixed. After apportionment of power generation plant costs to the four departments, the service department overheads are to be redistributed on the following bases: PD1 PD2 SD1 SD2 SD1 50% 40% - 10% SD2 60% 20% 20% - You are required to: (i) Apportion the power generation plant costs to the four departments. (ii) Re-apportion services department cost to production departments. A company has two production departments and two service departments. The data relating to a period are as under: Production Departments Service Departments PD 1 PD 2 SD1 SD2 Direct Materials (`) 80,000 40,000 20,000 30,000 Direct Wages (`) 95,000 50,000 30,000 20,000 Overheads (`) 80,000 50,000 40,000 30,000 Power Requirement at Normal capacity operations (Kwh) 25,000 30,000 15,000 10,000 Answer to MTP_Intermediate_Syllabus 2016_Dec 2019_Set 1 DoS, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 5 Actual power consumption during the period (Kwh) 12,000 20,000 8,000 12,000 The power requirement of these departments is met by a power generation plant. The said plant incurred an expenditure, which is not included above, of ` 1,21,875 out of which a sum of ` 84,375 was variable and the rest fixed. After apportionment of power generation plant costs to the four departments, the service department overheads are to be redistributed on the following bases: PD1 PD2 SD1 SD2 SD1 50% 40% - 10% SD2 60% 20% 20% - You are required to: (i) Apportion the power generation plant costs to the four departments. (ii) Re-apportion services department cost to production departments.