Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Example of Over and under absorption of production overhead costs
By employing data from diagram assume such the production overhead absorption rate was computed where an activity of two hundred machine hours was estimated. Prepare a summary showing any over or beneath absorption of overhead cost whereas the real machine hours charged to jobs turns out to be as:
a) One hundred fifty hours
b) Two hundred fifty hours
Solution
Absorption rate is Shs. 5.50 per machine hour. It may be analyzed into fixed rate of Shs.2.50 per machine hour and variable rate; of Shs. 3 per machine hour.
a) Where real activity is one hundred fifty hours
Fixed
Variable
Total
Shs.
Overhead incurred
500
450
950
Variable overhead absorbed
(450)
(150 x 3)
Fixed overhead absorbed
(375)
(150 x 2.50)
Total Overhead absorbed
(825)
(150 x 5.50)
____
___
Under absorption of overhead
125
NIL
b) Where actual activity is two hundred fifty hours
Fixed Shs.
Variable Shs.
Total Shs.
750
1250
(750)
(250 x 3)
(625)
(250 x 2.50)
(1375)
(250 x 5.50)
c) The absorption and Expenditure level of production overhead cost
A charge in expenditure on an overhead cost item may happen due to a charge in the price per unit and/or due to change in the number of units of the overhead commodity that are necessary. Expenditure changes can affect the absorption of both variable and fixed overheads.
Optimise Manufacturing Cost Of late it is perceived that in order to optimise manufacturing cost, a product might be designed and financed in one country; its material /compon
Ordering cost is incurred whenever the inventory is replenished. It includes costs associated with the processing and chasing of the purchase order transportation, inspec
Variable Overhead Variance (VOHV) VOHV is defined by ICMA, London, as 'the variation between the standard variable production overhead absorbed in the production achieved, whet
Describe the meaning of the fixed production overhead variances calculated under the standard absorption costing system and talk about their usefulness to the management of X Ltd.
Marginal Costing and Marginal Cost Marginal Costing is an optionally method of costing to absorption costing , In marginal costing, merely variable costs are charged like a
Waylander Coatings Company purchased waterproofing equipment on January 6, 2013, for $320,000.The equipment was expected to have a useful life of four years, or 20,000 operating ho
Shirley and Ken are in partnership, trading in the construction industry. The year end for the partnership business is 30 June. You are the Assistant Accountant and have been as
Cost Components Companies which manufacture a product face an elaborated set of accounting issues. Additionally the usual accounting matters related with selling and administra
The state legislature has voted to develop a grant-in-aid policy to try and induce local communities to devote more resources to improving their infrastructure. Town O = Has a
Methods of Allocating Service Costs Direct Method The service costs are merely allocated to the production department according to the usage of the services given. St
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd