Calculate capacity ratio and efficiency ratio, Cost Accounting

Woodall Ltd has two production departments, X and Y. For month 2, the company budgets its overhead costs as:

 

X

Y

Variable overhead

$23,000

$42,000

Fixed overhead

$18,000

$18,000

The absorption rate is based on labour hours in each department. The budgeted hours in each department are 5,000 for X and 8,000 for Y.

 At the end of month 2, department X had actually worked 4,900 hours, and department Y had worked 8,200 hours, and the standard hours produced were 5,200 in Department X and 8,100 in Department Y.

The actual expenditure on overhead for the month was:

Department X $42,500                            Department Y $59,500

 Required

(a) Calculate the under/over absorption of overhead in both of departments X and Y.

(b) State the factors that give rise to the under/over absorption of overhead.

(c) Analyse your answer to (a) above under the headings stated in b) above.

(d) State what is meant by the term "standard hour".

(e) For each of departments X and Y, calculate the following:

(i) Capacity Ratio,

(ii) Efficiency Ratio

(iii) Activity (Production Volume) Ratio

Posted Date: 2/26/2013 7:10:45 AM | Location : United States







Related Discussions:- Calculate capacity ratio and efficiency ratio, Assignment Help, Ask Question on Calculate capacity ratio and efficiency ratio, Get Answer, Expert's Help, Calculate capacity ratio and efficiency ratio Discussions

Write discussion on Calculate capacity ratio and efficiency ratio
Your posts are moderated
Related Questions
On July 1, 2008, Falk Company signed a contract to lease space in a building for 15 years. The lease contract calls for annual (prepaid) rental payments of $100,000 on each July 1


Eagle Company is considering the purchase of an asset for $100,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Comput

Suppose the Danny can prepare 50 pizzas or 100 sandwiches in an hour and Steve can produce 15 pizzas or 9 sandwiches. a) Draw each individual's PPF. b) Calculate the oppor

The Integrated Management Project is to be based on an organisation, a strategic business unit, or profit centre that has good potential for growth and development. The brief is to

Business Management Business Management includes planning and staffing, organizing, directing and controlling an organization's activities so like to meet a specified objectiv

Most of David's clients are local. However, a few of his clients require out of town travel. He incurred $2,500 of airfare, $1,570 in lodging and $1,313 in meals relating to the bu

Q. What are the advantages and disadvantages of free float? Advantages: It is one of the most suitable ER regimes for transitional countries that experience external shocks l

Limitations of Budgeting 1. Too mush reliance may reason resistance or inflexibility to change. 2. Difficult to set levels of attainment. It may result into too tight budg