Calculate capacity ratio and efficiency ratio, Cost Accounting

Assignment Help:

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


Related Discussions:- Calculate capacity ratio and efficiency ratio

Estimate the manufacturing cost for bearing housing, Estimate the manufactu...

Estimate the manufacturing cost for a bearing housing following the Formula Student Costing Scheme.  Dimensions and materials of the bearing housing will depend on your student

Cost estimation methods, using the high low method how do i calculate the c...

using the high low method how do i calculate the costs that are expected when the output expected is out of the range given for example cost prdctn volume 110000

Calculate the rate of learning of initial production phase, Calculate the r...

Calculate the rate of learning at which the initial production phase profit target would be achieved, assuming no other cost savings can be made.   Assuming no other cost savi

Mini Report about Brand Image, Write a mini report in which you "Critically...

Write a mini report in which you "Critically Describe, Aanlyse and Reflect on the Brand Image Extension.  This task must include evidence of collection primary data on the same

Example of high - low method of cost estimation, Example of High - Low Meth...

Example of High - Low Method of Cost Estimation Based on the performance, such you have been provided along with the given information regarding ABC Ltd for the year ended on

Valuation of work in progress, Valuation of Work In Progress The con...

Valuation of Work In Progress The concept of Equivalent units It is a notional quantity of completed goods in the production process. This is a collection of work applic

Cost variance and schedule variance, (i) In terms of cashflow, which month ...

(i) In terms of cashflow, which month will be the most costly for your project? (ii) If the 3rd and 4th months are more expensive by 25% each because the outsourced labour took

Determine a simplified single cost allocation rate, When implementing ABC, ...

When implementing ABC, once a company has identified business activities and their costs, the company will probably: A) determine a simplified single cost allocation rate B)

Balance sheet and income statement, First of all, look at the balance sheet...

First of all, look at the balance sheet and income statement as a whole and spot the problem with it. Answer all questions given in the question + dig into each element of the bala

How many coupon bonds would you need to issue, 1. Suppose your company need...

1. Suppose your company needs to raise $30 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and you're

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd