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

Apportionment of overheads, Apportionment of Overheads Apportionment...

Apportionment of Overheads Apportionment of overheads occurs whereas the net value of an overhead item is shared among more or two cost centers that employ the overheads. Th

Purpose of cost estimation, Purpose of Cost Estimation In estimating i...

Purpose of Cost Estimation In estimating it assists the future expenditure as cost prediction like the expenditure will depend upon the cost of the respective activities a)

Cost benefit approach - terms used in cost accounting, Cost Benefit Approac...

Cost Benefit Approach - Terms Used in Cost Accounting Is the primary criterion for selecting with alternative accounting approaches? There is a direct relationship in a co

Accrued income, Accrued income is an amount earned although not in reality ...

Accrued income is an amount earned although not in reality received during the accounting period or till the date of preparation of last accounts for the period concerned. The firs

Gross rental revenue, Operating Income 1. Operating Income is derived f...

Operating Income 1. Operating Income is derived from two sources, Rental Income from businesses operating in the warehouse complex and Interest Income of the project operating

Prepare the appropriate entries for january 1, A corporation acquired a tru...

A corporation acquired a truck on July 1, 2012, at a cost of $162,000. The truck has a six-year useful life and an estimated salvage value of $18,000. The straight-line method of d

Definitions of manufacturing concepts interstate, Definitions of manufactur...

Definitions of manufacturing concepts  Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:  Materials and supplies used

Estimate the conversion value- stock price volatility, (a)  (i) Conversi...

(a)  (i) Conversion Value Conversion Value = Conversion Ratio * Stock Price                 = 22*$40 = $880 (ii) Market Conversion Price Market Conversion Price =

Finance and logistics, responsibility of director of finance and logistics

responsibility of director of finance and logistics

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