C Ltd has two departments A & B. Overhead is applied based on direct labour hours in department A and machine hours in department B. The following additional information is available: Budgeted Overheads Budgeted direct labour hours Budgeted direct labour cost Budgeted machine hours i) ii) iii) Department A Department B $300,000 $360,000 50,000 40,000 $240,000 $330,000 68,000 80,000 Compute the overhead rate for Department A. Compute the overhead rate for Department B. Given that the actual overheads were as follows Direct labour hours Direct labour cost Machine hours Actual overheads Dept. A 45,000 $60,000 25,000 $285,000 Dept. B 35,000 $50,000 75,000 $320,000 Calculate the under- or over-applied overheads for each department and for the organization as a whole.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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C Ltd has two departments A & B. Overhead is applied based on direct labour hours in
department A and machine hours in department B.
The following additional information is available:
i)
ii)
iii)
Budgeted Overheads
Budgeted direct labour hours
Budgeted direct labour cost
Budgeted machine hours
Department A Department B
$300,000
$360,000
50,000
40,000
$240,000
$330,000
68,000
80,000
Compute the overhead rate for Department A.
Compute the overhead rate for Department B.
Given that the actual overheads were as follows
Direct labour hours
Direct labour cost
Machine hours
Actual overheads
Dept. A
45,000
$60,000
25,000
$285,000
Dept. B
35,000
$50,000
75,000
$320,000
Calculate the under- or over-applied overheads for each department and for the
organization as a whole.
Transcribed Image Text:C Ltd has two departments A & B. Overhead is applied based on direct labour hours in department A and machine hours in department B. The following additional information is available: i) ii) iii) Budgeted Overheads Budgeted direct labour hours Budgeted direct labour cost Budgeted machine hours Department A Department B $300,000 $360,000 50,000 40,000 $240,000 $330,000 68,000 80,000 Compute the overhead rate for Department A. Compute the overhead rate for Department B. Given that the actual overheads were as follows Direct labour hours Direct labour cost Machine hours Actual overheads Dept. A 45,000 $60,000 25,000 $285,000 Dept. B 35,000 $50,000 75,000 $320,000 Calculate the under- or over-applied overheads for each department and for the organization as a whole.
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