Shilongo Ltd uses costing to attribute costs to individual products and services provided to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company three production departments Machining, Assembly and Finishing; and two service departments Stores and Maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance 2,500 1,500 1,000 Overhead cost $ 6,000 800 The number of machine and labor hours budgeted for the forthcoming period is budgeted as follows:- Machining Assembly Finishing Machine hours 500 40 50 Labor hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a Labor hour basis; and in Machining departments they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% 10% Required: b) Calculate the overhead absorption rates for departments Machining, Assembly and Finishing for the forthcoming period. (work to nearest cent)

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Shilongo Ltd uses costing to attribute costs to individual products and services provided
to its customers. It has begun the preparation of its fixed production cost budget for the
forthcoming period. The company three production departments Machining, Assembly
and Finishing; and two service departments Stores and Maintenance.
The following costs have been produced:
Machining Assembly Finishing Stores Maintenance
2,500 1,500 1,000
Overhead cost $
6,000
800
The number of machine and labor hours budgeted for the forthcoming period is
budgeted as follows:-
Machining Assembly Finishing
Machine hours
500
40
50
Labor hours
100
300
200
Overheads are absorbed in Assembly and Finishing departments on a Labor hour
basis; and in Machining departments they are absorbed on a machine hour basis.
It has been estimated that service departments usage is as follows:
Machining Assembly Finishing Stores Maintenance
Maintenance
55%
20%
20%
5%
- Stores
40%
30%
20%
10%
Required:
b) Calculate the overhead absorption rates for departments Machining, Assembly
and Finishing for the forthcoming period. (work to nearest cent)
Transcribed Image Text:Shilongo Ltd uses costing to attribute costs to individual products and services provided to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company three production departments Machining, Assembly and Finishing; and two service departments Stores and Maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance 2,500 1,500 1,000 Overhead cost $ 6,000 800 The number of machine and labor hours budgeted for the forthcoming period is budgeted as follows:- Machining Assembly Finishing Machine hours 500 40 50 Labor hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a Labor hour basis; and in Machining departments they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% 10% Required: b) Calculate the overhead absorption rates for departments Machining, Assembly and Finishing for the forthcoming period. (work to nearest cent)
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