Absorption (Total) Costing Answers
Absorption (Total) Costing Answers
QUESTION 1
(a & b) Overheads analysis sheet
= $5/Machine hour
Budgeted overhead
Assembly shop =
Direct labour hours
$19 200
=
2 400
$69 520
Moulding =
(30 people × 35 hours ×24 weeks)
= $2.76/hour
$79 400
Assembly =
(40 people × 35 hours ×24 weeks)
= $2.36/hour
$46 080
Paint shop =
(20 people × 35 hours ×24 weeks)
= $2.74/hour
QUESTION 3
(a) Distinguish between overhead allocation and overhead apportionment
Allocation Apportionment
Assignment of particular cost to a particular These costs are common to various departments
department or cost centre. and cannot be charged to a particular department
or cost centre.
No base is required for allocation of cost to a An equitable base is required for apportionment
department. It is a direct process. of cost to the production or services department.
$600 000
(c) Machining department =
40 000
= $15/Machine hour
$400 000
Assembly department =
50 000
Budgeted overhead
(ii) Machine shop =
Machine hours
$277 000
=
55 400
= $5/Machine hour
Budgeted overhead
Assembly shop =
Direct labour hours
$192 000
=
24 000
= $1.41/Machine hour
$431 967
Assembly department =
300 000
Assembly department
$
Actual overhead 445 000
Absorbed overhead (1.44 × 280 000) 403 200
Under-absorbed 41 800
QUESTION 6
(a) Overhead Analysis Sheet
$ $ $ $
Depreciation of plant Value of plant 5 375 500 125 6 000
Lighting and heating Floor area (m2) 2 250 2 025 225 4 500
Plant insurance Value of plant 4 300 400 100 4 800
Rent Floor area (m2) 9 000 8 100 900 18 000
Supervision Number of employees 12 000 8 000 5 000 25 000
32 925 19 025 6 350 58 300
Re-apportionment
Stores No. of orders from stores 4 500 1 850 (6 350)
Budgeted overhead 37 425 20 875 – 58 300
= $8.81/Machine hour
$20 875
Finishing department =
4 950
$
Actual overhead 48 340
Absorbed overhead 52 860
Over-absorbed 4 520
Finishing department
$
Actual overhead 22 780
Absorbed overhead 21 100
Under-absorbed 1 680