Transcript Slide 1

Overhead
distribution
Departmentalization
1 Process of dividing the factory into number
of Segments Is called Departmentalization
P1
P2
Prod Departments
P3
S1
S1
Service Dept.
Departmentalization
2 Process of allocating and apportioning
POHEs to different departments or
cost centers (Prod & Service )
Factory
Overheads
P1
P2
Prod Departments
P3
S1
S1
Service Dept.
Departmentalization
Factory
Overheads
Allocation &
Apportionment
P1
P2
Prod Departments
P3
S1
S1
Service Dept.
Service Departments
Repair
Department
Maintenance
Department
Power House
Canteen
Purchase
Tool Room
Personnel
Department
Stores
Boiler
House
Time-Keeping
Transport
Fire Protection
Distribution of
Overhead
ALLOCATION
Specific
Costs
APPORTIONMENT
Common
Costs
Distribution of
Overhead
ALLOCATION
Specific
Costs
Allocating whole
amount Of an item
of POHs to the
department for which
The expenditure was
incurred
Distribution of
Overhead
APPORTIONMENT
Common costs are apportioned
Amongst different departments
or cost centers on some basis
Common
Costs
Principal Basis of Apportionment Of Overheads
Floor Area
Capital Value Of Assets
Number Of Employees
Machine Hours
Direct Labour Hours
Light Points
Kilowatt Hours
Technical Analysis
BASIS FOR APPORTIONMENT
Rent, Rates & Taxes, Lighting & Heating
Insurance & depreciation of Building,
Cost of repairs & maintenance of
Building, Air Conditioning
Insurance & Depreciation on Plant &
Machinery, maintenance of PM,
Insurance on building, etc
Floor Area
Occupied
Capital
Value
BASIS FOR APPORTIONMENT
Welfare Expenses, time-Keeping ,pay-roll
Office, Canteen, Recreation, Supervision
Medical Expenses
Repairs & Maintenance of Plant &
Machinery
No.Of
Employees
Machine
Hours
BASIS FOR APPORTIONMENT
Direct
Labour
Hrs
Light Points
Or
Kilowatt Hours
Work’s Manager’s Remuneration, Salary of
Supervisors etc
Electricity Charges
BASIS FOR APPORTIONMENT
Technical
Estimate
Horse
Power
Where not possible to apportion on some
Bases Technical estimate is made
Motive Power Expenses
BASIS FOR APPORTIONMENT
Value or
Weight of
Materials
Truck Mileage
Tonnage
Truck Hours
No.Of Pakages
Store Keeping Expenses
Transport Service Expenses
PRINCIPLES OF APPORTIONMENT
Utility or
Service
Principle
Survey Method
Ability To Pay
Efficiency
Principle
PRINCIPLES OF APPORTIONMENT
Utility or
Service
Principle
Service or Benefits
received
By the department
PRINCIPLES OF APPORTIONMENT
Ability To Pay
What the Traffic can bear
Basis of Sales or Profit
PRINCIPLES OF APPORTIONMENT
Survey Method
When Difficult to select Basis
Production Manager’s Salary
(Time spent in Each Dept)
PRINCIPLES OF APPORTIONMENT
Out put as the basis
Higher Production
Low Overhead Rate
Low Production
High OH Rate
Efficiency
Principle
Quick Check
Identify the Basis for following Overheads
Rent
Plant Repairs
Power
Depreciation of Building
Building Repairs
Insurance Of Building
Fire Insurance of Stock
Lighting Expenses
Supervision
Power
ESI
Employer’s Cont. to PF
Amenities To Staff
Canteen
Gn. Overheads
Floor Area
Value of Plant
Machine Hours/HP/VM
Value Of Building
Value Of Building
Floor Area
Value Of Stock
No.Of Light Points
No.Of Employees
Kilowatt/Value of Plant
Direct Wages
Direct Wages
No.Of Employees/Wages
No.Of Employees
Direct Wages
Summary Of Departmental Overhead Distribution
Particulars
Basis
Rent
Plant Maintenance
Area(15:11:9:5)
Value Of Mch. (4:3:2:1)
Depreciation
Value Of Mch. (4:3:2:1)
Lighting
Area(15:11:9:5)
Insurance
Stock Value(5:3:2)
Employer's Cont to PF Wages (4:3:2:1)
Energy
Value Of Mch. (4:3:2:1)
Supervision
No.Of Emp (6:4:3:2)
Total
Total Production Departments
B
C
D
(Rs) A
(Rs)
(Rs)
(Rs) (Rs)
2,000
1,200
900
200
1,000
300
1,800
3,000
750
480
360
75
500
120
720
1,200
550
360
270
55
300
90
540
800
450
240
180
45
200
60
360
600
250
120
90
25
-30
180
400
10,400 4,205
2,965
2,135
1,095
Summary Of Departmental Overhead Distribution
Particulars
Rent
Repairs To Plant
Depreciation
Lighting
Supervision
Fire Insurance
Power
ESI
Basis
Total Production Dept.
(Rs) A
B
C
Area
10,000
Value Of Plant
6,000
“
4,500
Light Points
1,000
No Of Employees 15,000
Value Of Stock
5,000
Value Of Plant
9,000
Wages
1,500
Total
52,000
SD
D
(Rs)
(Rs)
(Rs) (Rs)
3,750 2,750 2,250 1,250
2,400 1,800 1,200 600
1,800 1,350 900 450
375
275 225 125
6,000 4,500 3,000 1,500
2,500 1,500 1,000 3,600 2,700 1,800 900
600 400
300 200
21,500 15,27510,675 5,025
Redistribution of Overheads
Reapportionment of Overheads
Secondary Distribution Of Overheads
Service Department Cost
Re-Apportionment
Production
Departments
Carry out the
central purposes
of an organization.
Service
Departments
Provide support
that facilitates the
activities of production
departments.
The Need for Cost
Re-Apportionment
How are service
department costs
charged to operating
departments?
First, we identify the factor
that drives costs in the
service department.
This cost driver is used
as the apportionment base.
The Need for Cost Apportionment
Second, we measure the
consumption of the
apportionment base in the
operating departments.
The Need for Cost Apportionment
Third, we apportion
the service
department cost
based on the
relative amount of
the apportionment base
used in each
operating department.
The Need for Cost Apportionment
What happens to
service department
costs after they
are apportioned to
operating
departments?
Apportioned service department
costs become a part of
the overhead in each
operating department.
The Need for Cost Apportionment
Service
Department
(Cafeteria)
Service
Department
(Accounting)
Service
Department
(Personnel)
First Stage Apportionment
Service department costs are
apportioned to operating
departments.
Operating
Department
(Machining)
Operating
Department
(Assembly)
The
Products
The Need for Cost Apportionment
Service
Department
(Cafeteria)
Service
Department
(Accounting)
Service
Department
(Personnel)
Second Stage Apportionment
Operating department overhead costs and
apportioned service department costs are
applied to products.
Operating
Department
(Machining)
Operating
Department
(Assembly)
The
Products
Selecting Apportionment Bases
Personnel:
Number of
employees
Receiving:
Units
handled
Security:
Square
footage
Criteria
Easiest
Accounting:
Staff
hours
Custodial:
Square
footage
Cafeteria:
Number of
employees
Power:
Kilowatt
hours
Re- apportionment Basis
Purchase
Department
Stores
No of Purchase Orders or value of Materials
Purchased for each Production Department
•Value or Quantity of Materials Issued
•No. Of Materials Requisitions
Re- apportionment Basis
Weight & Distance
inspection
Internal Transport
Inspection Hrs. Devoted to each
Department
Re- apportionment Basis
Time Keeping,
Security
Canteen
Welfare
Recreation
Medical
Personnel
Pay Roll
•Number Of Employees
•Total Labour Hours or
•Wages or Salaries
Re- apportionment Basis
Hrs. Devoted or Worked for
Each Department
Factory
Office
Maintenance
Department
No .Of Employees
Re- apportionment Basis
Relative Area Of Each Deptt
Boiler
House
Building
Service Deptt
% Of Steam Utilized
Interdepartmental Services
Problem
Re Apportioning costs when service departments
provide services to each other
Solutions
Direct Method
Step method
Reciprocal method
Direct Method
Interactions
between service
departments are
ignored and all
costs are
allocated directly
to operating
departments.
Service
Department
(Cafeteria)
Operating
Department
(Machining)
Service
Department
(Custodial)
Operating
Department
(Assembly)
Direct Method Example
Service Department
Apportionment Base
Cafeteria
Custodial
Number of employees
Square feet occupied
Direct Method Example
Direct Method Example
INR 360,000 ×
20
20 + 30
= INR 144,000
Apportionment base: Number of employees
Direct Method Example
INR 360,000 ×
30
20 + 30
= INR 216,000
Apportionment base: Number of employees
Direct Method Example
INR 90,000 ×
25,000
25,000 + 50,000
= INR 30,000
Apportionment base: Square feet occupied
Direct Method Example
INR 90,000 ×
50,000
25,000 + 50,000
= INR 60,000
Apportionment base: Square feet occupied
Overhead Analysis Sheet
Items
Indirect wages
Indirect materials
General overhead
Amenities to staff
Employer’s
contribution to E.S.I.
Power
Depreciation
Apportionment of
workshop overhead
Apportionment of
office overhead
Basis
Actual
Actual
Direct wages
(4:5:6)
No.of employees
(6:5:6:3:5)
Direct Wages
(4:5:6)
H.P. of machine
X
Machine hours
worked
(6:16:15:1)
15% of value of
machinery
Total
(Rs.)
Production Department
P1
P2
P3
Service Department
Office
Worksho
p
25,000
10,950
1,500
3,000
2,000
400
3,000
3,000
500
4,000
3,000
600
10,000
1,100
-
5,000
1,850
-
12,500
3,000
2,500
3,000
1,500
2,500
1,200
320
400
480
-
-
3,800
600
1,600
1,500
-
100
15,750
4,500
5,250
3,750
-
2,250
70,700
13,820
16,250
16,330
12,600
11,700
Machine hours
(2:4:3)
2,600
5,200
3,900
-
(-) 11,700
Direct wages
(4:5:6)
3,360
4,200
5,040
(-12,600
-
19,780
25,650
25,270
Allocated overhead Total
-
-
Bharat Engineering Works Departmental
Overhead Distribution Statement (For 12 Months)
Particulars of
Expenses
Rent
Basis of
Distribution
Total
Rs.
Production Deptts.
A
C
S
36,000
9,000
7,500
13,500
6,000
8,250
3,250
1,500
1,500
2,000
5,200
1,200
1,400
1,800
800
22,000
5,500
6,600
8,800
1,100
5,600
1,400
1,400
1,800
1,000
6,500
1,000
1,500
3,000
1,000
8,000
---
---
---
8,000
91,550
21,350
19,900
30,400
19,900
+5,970
+3,980
+9,950
-19,900
(A)
27,320
23,880
40,350
Nil
Effective labour hours (see workings)
(No. of worker x working hours)
(B)
3,200
4,800
9,600
8.5375
4.975
4.203
Power
Indirect wages
Depreciation of
machinery
Electricity
Canteen
expenses
Direct wages
Floor space
(30:25:45:20)
H.P. of machine
(65:30:30:40)
Direct Wages
(12:14:18:8)
Value of machine
(50:60:80:10)
Light points
(7:7:9:5)
No. of workers
(2:3:6:2)
Actual
B
Service
Dept.
Re-distribution of expenses of service
department to the production departments on
the basis of service rendered 30%: 20%:50%
Allocated overhead total
Labour hour rate (A ÷ B)
Step Method
Once a service
department’s costs
are apportioned,
other service
department costs
are not allocated
back to it.
Service
Department
(Cafeteria)
Operating
Department
(Machining)
Service
Department
(Custodial)
Operating
Department
(Assembly)
Step Method
Custodial will
have a new
total to Apportion
to operating
departments; its
own costs plus
those costs
allocated from
the cafeteria.
Service
Department
(Cafeteria)
Operating
Department
(Machining)
Service
Department
(Custodial)
Operating
Department
(Assembly)
Step Method
1 Identify the SD which renders service to larger No’s of other Deptts
2 Distribute its Costs to other Deptts , Including service Department
3 Identify the next service Department. Which renders service to the
next largest No’s
4 Continue the process till Amount is Exhausted
5 If all SD renders service to = No of Departments. Than cost of SD
with largest amount be taken first
Step Method Example
We will use the same data used
in the direct method example.
Service Department
Apportionment Base
Cafeteria
Custodial
Number of employees
Square feet occupied
Step Method Example
Apportion Cafeteria costs first since
it provides more service than Custodial.
Step Method Example
INR 360,000 ×
10
10 + 20 + 30
= INR 60,000
Apportionment base: Number of employees
Step Method Example
INR 360,000 ×
20
10 + 20 + 30
= INR 120,000
Apportionment base: Number of employees
Step Method Example
INR 360,000 ×
30
10 + 20 + 30
= INR 180,000
Apportionment base: Number of employees
Step Method Example
New total = INR 90,000 original custodial cost
plus INR 60,000 apportioned from the cafeteria.
Step Method Example
INR 150,000 ×
25,000
25,000 + 50,000
= INR 50,000
Apportionment base: Square feet occupied
Step Method Example
INR 150,000 ×
50,000
25,000 + 50,000
= INR 100,000
Apportionment base: Square feet occupied
Comparison of Methods
SECONDARY OVERHEAD DISTRIBUTION SUMMARY
Particulars
Total Rs.
Base
Service Departments (Rs.)
P
Factory
overhead
5,95,000
Given
Q
R
Production Departments
S
X
Y
Z
45,000
75,000
1,05,000
30,000
1,93,000
64,000
83,000
-45,000
5,000
4,000
5,000
10,000
12,500
8,500
-80,000
24,000
12,000
16,000
12,000
16,000
-1,33,000
19,000
57,000
28,500
28,500
-66,000
24,000
18,000
24,000
3,00,000
1,35,000
1,60,000
Add :
Service
Dept.costs
P
0
Q
0
R
0
S
Total
OHEs of
prod.depts
0
5,95,000
No. of
Employees
(50:40:50:
100:125:85)
DLHs
Rs.80,000 in
(6:3:4:3:4)
Area
(Rs.1,33,000
in
(10:30:15:
15)
DLHs
(Rs.66,000
in 4:3:4)
Reciprocal Services Method
Interdepartmental
services are given
full recognition
rather than partial
recognition as with
the step method.
Service
Department
(Cafeteria)
Operating
Department
(Machining)
Service
Department
(Custodial)
Operating
Department
(Assembly)
Because of its mathematical complexity,
the reciprocal method is rarely used.
Reciprocal Services Methods
Trial & Error
Method
Repeated
Distribution
Method
Algebraic
Simultaneous
Equation
Method
Reciprocal Services Methods
Trial & Error
Method
Cost Of one Service Dept (Say A ) is apportioned
To another Service Dept (Say B) based on service rendered
The cost of another dept (B) plus its share
In the cost of first service department (A)
Is again apportioned to first service department
The amount so apportioned to A will again be apportioned
to the service department B
The process continues till amount becomes negligible
Calculation Of Total Costs Of Service Departments
Service Departments (Rs)
X
Total Exp as per Primary Distribution
Charge
10% 0f Rs 23,400 (X) to Y
20% of Rs.32,340 (Y) to X
10% of Rs.6,468 (X) to Y
20% of Rs.647 (Y) to X
10% of Rs.129 (X) to Y
20% of Rs.12 (Y) to X
Y
23,400
30,000
2,340
6,468
647
129
13
3
(Since Rs.3 to be apportioned is very small
distribution process is stopped )
Total
30,000
33,000
Secondary Overhead Distribution Summary
Production Departments
(Rs.)
Particulars
A
Total expenses as per primary
overhead distribution
summary
Add Service Dept. Costs :
X : Rs.30,000 at 20%, 40%
& 30% to A,B, and C
Y : Rs.33,000 at 40%, 20%
& 20% to A, B & C
Total
B
Total Rs.
C
80,000
70,000
50,000
2,00,000
6,000
12,000
9,000
27,000
13,200
6,600
6,600
26,400
65,600
2,53,400
99,200 88,600
Reciprocal Services Methods
Repeated
Distribution
Method
1 Distribute the cost of a service Dept . to the Production
and service department Using the percentage
2 Apportion the cost of 2nd service department (Aggregate)
to production and other service department as per % given
3 Use the same procedure with other service departments
till the cost of service departments become negligible
Question
A factory is having 3 prod . Departments A,B & C, and 2 service
Departments Boiler House and Pump Room. The boiler house
was to depend upon the pump Room for supply of water and in turn ,
depends upon the boiler house for supply of steam power for driving
the pump The expenses incurred by the production department
during the period are: A Rs 8,00,000,B Rs 7,00,000
And C Rs 5,00,000.The expenses of Boiler house are Rs 2,34,000
and the Pump House Rs 3,00,000.The expenses of Boiler House
and Pump house are Apportioned to the prod. departments
on the following basis
Expenses Of Boiler House
A
20%
B
40%
C
30%
Expenses Of Pump Room
40%
20%
20%
BH
20%
PR
10%
-
Secondary Overhead Distribution Summary
Particulars
Total
Rs
Prod Departments (Rs)
Basis
P Distribution 25,34,000 given
Add Service Dept. Costs
A
B
C
8,00,000 7,00,000 5,00,000
Service Dept (Rs)
Boiler
2,34,000
Pump
3,00,000
Boiler House
0
20:40:30:10 46,000
93,600
70,200
Pump Room
0
40:20:20:20 1,29,360
64,680
6 4,680
Boiler House
0
20:40:30:10 12,936
5,872
19,404
Pump Room
0
40:20:20:20
2,587
1,294
1,294
Boiler House
0
20::40:30:20
259
517
388
Pump House
0
40:20:30:20
52
26
26
25
-129
Boiler House
0
20:40:20:20
5
10
8
-25
2
Pump House
0
40:20:20:20
1
1
0
0
Total 25,34,000
-2,34,000
64,680
23,400
-3,23,400
-64,680
6,468
1,293
-6,468
-1293
9,92,000 8,86,000 6,56,000
0
129
-2
0
Reciprocal Services Methods
Algebraic
Simultaneous
Equation
Method
•Total Costs of Service Departments are
Expressed in algebraic equation
•Equations are developed on the basis of
Primary distribution & % of service rendered
to each other
•Total Costs of Service Departments can
Be calculated by solving EQUATIONS
Algebraic Equation
X= OHE’s + % of Y
Y= OHE’s + % of X
Service Department OHE’S can be apportioned
R
M
N P
R
20% 30% 40% -
S
10%
S
30% 40% 10% 20% -
Quick Check Data
The direct method of Apportionment is used.
Allocation bases:
Business school administration costs (ADMIN):
Number of employees
Business
administration computer services
(BACS): Number of personal computers
Quick Check 
How much cost will be apportioned from
Administration to Accounting?
a. INR 36,000
b. INR144,000
c. INR180,000
d. INR 27,000
Quick Check 
How much cost will be apportioned from
Administration to Accounting?
a. INR 36,000
b. INR144,000
c. INR180,000
d. INR 27,000
INR180,000X
20
20 + 80
= INR 36,000
Quick Check 
How much total cost will be apportioned
from ADMIN and BACS combined to the
Accounting Department?
a. INR 52,500
b. INR135,000
c. INR 270,000
d. INR 49,500
Quick Check 
How much total cost will be apportioned from
ADMIN and BACS combined to the Accounting
Department?
a. INR 52,500
b. INR 135,000
c. INR 270,000
d. INR 49,500
INR 90,000 ×
18
18 + 102
= INR 13,500
Quick Check Data
The step method of apportionment is used.
Apportionment bases:
Business school administration costs (ADMIN):
Number of employees
Business
administration computer services
(BACS): Number of personal computers
Quick Check 
How much total cost will be apportioned
from ADMIN and BACS combined to the
Accounting Department?
a. INR 35,250
b. INR 49,072
c. INR 18,000
d. INR 26,333
Quick Check 
How much total cost will be apportioned from ADMIN
and BACS combined to the Accounting Department?
a. INR 35,250
b. INR 49,072
c. INR 18,000
d. INR 26,333
Overhead Appropriation
Few Questions
4. SECONDARY DISTRIBUTION SUMMARY
Cost of service
department
primary distribution
Canteen
Power house (light)
Power house (power)
Stores
Time keeping &
accounts
Repair shop
Basis of
apportionment
Total
Rs.
P1
P2
--No. of employee
(6:5:4)
No. of light points
(3:4:5)
House Power
(3:2:3)
No. of requisitions
(4:3:5)
No. of employee
(6:5:4)
63,000
1,500
20,000
600
18,000
500
25,000
400
1,200
300
400
500
4,000
1,500
1,000
1,500
3,600
1,200
900
1,500
3,000
1,200
1,000
800
Value of assets
(2:3:4)
4,500
1,000
1,500
2,000
80,800
25,800
23,300
31,700
Allocated overhead Total
Production Department
P3
1. Overhead Analysis Sheet
Items
Indirect wages
Indirect materials
General overhead
Amenities to staff
Employer’s
contribution to E.S.I.
Power
Depreciation
Basis
Actual
Actual
Direct wages
(4:5:6)
No.of employees
(6:5:6:3:5)
Direct Wages
(4:5:6)
H.P. of machine
X
Machine hours
worked
(6:16:15:1)
15% of value of
machinery
Total
(Rs.)
P1
P2
P3
Service Department
Office
Workshop
25,000
10,950
1,500
3,000
2,000
400
3,000
3,000
500
4,000
3,000
600
10,000
1,100
-
5,000
1,850
-
12,500
3,000
2,500
3,000
1,500
2,500
1,200
320
400
480
-
-
3,800
600
1,600
1,500
-
100
15,750
4,500
5,250
3,750
-
2,250
13,820
16,250
16,330
12,600
11,700
Machine hours
(2:4:3)
2,600
5,200
3,900
-
(-) 11,700
Direct wages
(4:5:6)
3,360
4,200
5,040
(-) 12,600
-
19,780
25,650
25,270
-
-
70,700
Apportionment of
workshop overhead
Apportionment of
office overhead
Production Department
Allocated overhead Total
2. OVERHEAD ANALYSIS SHEET
Items
Rent and rates
General lighting
Indirect wages
Power
Depreciation
Direct wages
Indirect materials
Apportionment of
Service
Departments
Overhead
S1
S2
Basis
Floor space
(4:5:6:4:1)
Light points
(2:3:4:2:1)
Direct wages
(600:400:600:300:39)
H.P. of Machine
(6:5:5:1)
Value of machines
(12:16:20:1:1)
Actual
Actual
Direct wages
(3:2:3)
Given
(2:3:5)
Total (A)
Working hours (B)
Overhead rate per working hour [(A) ÷(B)]
Total
(Rs.)
Service Deptt( Rs).
Production Deptt .(Rs)
P1
P2
P3
S1
5,000
1,000
1,250
1,500
1,000
250
600
100
150
200
100
50
1,939
600
400
600
300
39
1,500
600
300
500
100
-
10,000
2,400
3,200
4,000
200
200
1,695
966
300
200
200
1,500
-
195
266
21,700
5,000
5,500
7,000
3,200
1,000
1,200
800
1,200
(-) 3,200
-
200
300
500
-
(-) 1,000
6,400
2,560
6,600
3,000
8,700
1,500
Nil
Nil
2.50
2.20
5.80
21,700
S2
COST OF PRODUCT – X
Direct material
Direct Labour
( Rs)
50.00
30.00
Prime Cost
Factory Overhead :
P1 : 4 x 2.50
P2 : 5 x 2.20
P3 : 3 x 5.80
Cost of Product X
80.00
10.00
11.00
17.40
38.40
118.40
3. SECONDARY OVERHEAD DISTRIBUTION SUMMARY
Particulars
Total Rs.
Base
Service Departments (Rs.)
P
Factory
overhead
5,95,000
Given
Q
R
Production Departments
S
X
Y
Z
45,000
75,000
1,05,000
30,000
1,93,000
64,000
83,000
-45,000
5,000
4,000
5,000
10,000
12,500
8,500
-80,000
24,000
12,000
16,000
12,000
16,000
-1,33,000
19,000
57,000
28,500
28,500
-66,000
24,000
18,000
24,000
3,00,000
1,35,000
1,60,000
Add :
Service
Dept.costs
P
0
Q
0
R
0
S
Total
OHEs of
prod.depts
0
5,95,000
No. of
Employees
(50:40:50:
100:125:85)
DLHs
Rs.80,000 in
(6:3:4:3:4)
Area
(Rs.1,33,000
in
(10:30:15:
15)
DLHs
(Rs.66,000
in 4:3:4)
5. OVERHEAD DISTRIBUTION STATEMENT
Particulars of
Expenses
Basis of
Apportionment
Depreciation
Production Deptts.
X
Service Deptts.
Y
A
B
38,000
20,000
10,000
6,000
2,000
18,000
7,500
6,000
1,500
3,000
12,500
6,250
3,125
2,500
625
9,500
5,000
2,500
1,500
500
5,400
2,400
1,200
1,200
600
3,600
1,500
900
600
600
8,000
4,000
-----
-----
5,000
4,000
3000
---
99,000
42,650
+11,150
23,725
+7,433
22,300
-22,300
10,325
+3,717
Re-distribution of expenses of Deptt. A among X,
Y and B in ratio 3:2:1
Re-distribution of expenses of Dept. B between
X and Y equally
53,800
31,158
Nil
14,042
+7,021
+7,021
---
-14,042
60,821
38,179
Nil
Nil
Rent, Rates & Taxes
Power
Ins.on assets
Canteen exp.
Electricity
Direct wages
Direct material
Assets value
(10:5:3:1)
Floor space
(5:4:1:2)
H.P. of machine
(10:5:4:1)
Assets value
(10:5:3:1)
No. of workers
(100:50:50:25)
Light points
(25:15;10:10)
Actual
Actual
Total Rs.
Allocated overhead
7. STATEMENT SHOWING OVERHEAD EXPENSES OF PRODUCTION
DEPARTMENTS A AND B
Particulars of
Expenses
Direct material
Direct labour
Depreciation
Basis of
Apportionment
Production Deptts.
A
B
Service Deptts.
C
D
5,000
15,000
95,000
----50,000
----25,000
3,000
10,000
15,000
2,000
5,000
5,000
18,000
7,500
6,000
1,500
3,000
7,600
4,000
2,000
1,200
400
10,000
5,000
2,500
2,000
500
5,400
2,400
1,200
1,200
600
2,400
1,000
600
400
400
1,58,400
69,900
37,300
34,300
16,900
Re-distribution of expenses of service department
‘C’ Rs. 12,000 to D and balance of Rs. 22,300 to
A:B= 3:2
+13,380
+8,920
(-) 34,300
+12,000
83,280
46,220
Nil
28,900
26,010
2,890
---
(-)28,900
1,09,290
49,110
Nil
Nil
Rent,Rates & Tax
Insurance
Power
Canteen exp.
Electricity
Actual
Actual
Value of Assets
(10:5:3:1)
Floor space
(5:4:1:2)
Value of Assets
(10:5:3:1)
H.P. of machine
(10:5:4:1)
No. of workers
(100:50:50:25)
Light points
(25:15;10:10)
Total Rs.
Re-distribution of expenses of service
Department “D” to A:B = 9:1
Allocated overhead total
ATTENTION COMMERCE
STUDENTS
ACCOUNTING(FINANACIAL & COST) OF
ICMAP STAGE 1,2,3,4 (NEW CLASSES)
CA..MODULE B,C,D
PIPFA (FOUNDATION,INTERMEDIATE,FINAL)
ACCA-F1,F2,F3
BBA,MBA
B.COM(FRESH),M.COM
MA-ECONOMICS..O/A LEVELS
KHALID AZIZ…..0322-3385752
[email protected]