DEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE x * cS SEI IK IK IK SE IE EE IK IK IK 0314-4646739 0332-4646739 0336-4646739 ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD (Department of Commerce) Course: Cost Accounting (462) Semester: Autumn, 2024 Level: B. Com /Associate Degree ASSIGNMENT No. 2 Q.1 The following information is available regarding procurement and issuance of material inventory for the month of October, 2023 of a manufacturing company: 01.10.2023 Opening inventory of 800 units at Rs. 65 each. 06.10.2023 Purchases 200 units at Rs. 75 each. 09.10.2023 Issued 400 units to production. 12.10.2023 Issued 150 units to production. 16.10.2023 Purchased 300 units at Rs. 80 each. 24.10.2023 Issued 400 units to production. 27.10.2023Issued 250 units to production. Required: Compute the cost of materials issued to production and the value of 31 October 2023 inventory using perpetual inventory system under each of the following methods: - A) First in First Out method. B) Moving Average method. To solve this problem, let's compute the cost of materials issued and the closing inventory for October 2023 using the perpetual inventory system under both the FIFO and Moving Average methods. Solution Skillin Stamflay.com FEI IE Lk ek a ei I eR eK aK OR eaeDEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE x * cS FEE SK IK IK IK TE IE EE IK IK IK 3K 0314-4646739 0332-4646739 0336-4646739 1. First In First Out (FIFO) Method Under the FIFO method, the oldest inventory is issued first. The perpetual inventory records are updated after every transaction. Here's how it is computed: Opening Inventory (01.10.2023): 800 units @ Rs. 65 = Rs. 52,000 Transactions: - 06.10.2023 Purchases: 200 units @ Rs. 75 = Rs. 15,000 Inventory after purchase: + 800 units @ Rs. 65 + 200 units @ Rs. 75 2. 09.10.2023 Issued 400 units: From 800 units @ Rs. 65 — 400 units @Rs. 65 =Rs. 26,000 Inventory after issuance: + 400 units @ Rs. 65 200 units @ Rs. 75 3. 12.10.2023 Issued 150 units: From 400 units @ Rs. 65 — 150 units @Rs. 65 =Rs. 9,750 Inventory after issuance: 250 units @ Rs. 65 + 200 units @ Rs. 75 4. 16.10.2023 Purchases: 300 units @ Rs. 80 — Rs. 24,000 Inventory after purchase: Skilli Stamflay.com ling.pk Diya.pk SEI SII ESIC IORI ICSI IESE OR SIC IE IOI SISSIES HEISE 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OEFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE *x K cS DEIR IK IK IK AE IE IE SE OE SK IK IK IK IK 0314-4646739 0332-4646739 0336-4646 739 250 units @ Rs. 65 + 200 units @ Rs. 75 + 300 units @ Rs. 80 5. 24.10.2023 Issued 400 units: From 250 units @ Rs. 65 — 250 units @Rs. 65 = Rs. 16,250 From 200 units @ Rs. 75 — 150 units @ Rs. 75 = Rs. 11,250 Inventory after issuance: 50 units @ Rs. 75 300 units @ Rs. 80 6. 27.10.2023 Issued 250 units: From 50 units @ Rs. 75 — 50 units @ Rs. 75 = Rs. 3,750 From 300 units @ Rs. 80 — 200 units @ Rs. 80 = Rs. 16,000 Inventory after issuance: + 100 units @ Rs. 80 Closing Inventory (31.10.2023): 100 units @ Rs. 80 = Rs. 8,000 Cost of Materials Issued to Production (Total): = Rs. 26,000 + Rs. 9,750 + Rs. 16,250 + Rs. 11,250 + Rs. 3,750 + Rs. 16,000 = Rs. 83,000 2. Moving Average Method Under the Moving Average method, the average cost per unit is recalculated after every transaction involving purchases. The perpetual inventory is updated based on the recalculated average cost. Skilling.pk Stamflay.com 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OE KKK IK BGI OIOIIR I III I Ie IIDEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE x * cS x x SEITE IK IK IK IK 0314-4646739 0332-4646739 0336-4646739 Opening Inventory (01.10.2023): 800 units @ Rs. 65 = Rs. 52,000 Transactions: 1, 06.10.2023 Purchases: 200 units @ Rs. 75 = Rs. 15,000 New Average Cost per Unit: = (52,000 + 15,000) / (800 + 200) = Rs. 67 Inventory after purchase: 1,000 units @ Rs. 67 2. 09.10.2023 Issued 400 units: 400 units @ Rs. 67 = Rs. 26,800 Inventory after issuance: 600 units @ Rs. 67 3. 12.10.2023 Issued 150 units: 150 units @ Rs. 67 = Rs. 10,050 Inventory after issuance: 450 units @ Rs, 67 4, 16.10.2023 Purchases: 300 units @ Rs. 80 = Rs. 24,000 New Average Cost per Unit; = (450 x 67 + 300 = 80) / (450 + 300) =Rs. 72 Inventory after purchase: 750 units @ Rs. 72 5. 24.10.2023 Issued 400 units: 400 units @ Rs. 72 = Rs. 28,800 Inventory after issuance: 350 units @ Rs. 72 6. 27.10.2023 Issued 250 units: 250 units @ Rs. 72 = Rs. 18,000 Inventory after issuance: 100 units @ Rs. 72 Closing Inventory (31.10.2023): 100 units @ Rs. 72 = Rs. 7,200 Skilling. Stamflay.com BEAK TK TE IK IK EK IK IE SK IK OE Sea EE JOO III III I IIIDEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE x * cS SEI IK IK IK SE IE EE IK IK IK SKIKE TK IE EK EK 0314-4646739 0332-4646739 0336-4646739 Cost of Materials Issued to Production (Total): = Rs. 26,800 + Rs 10,050 + Rs. 28,800 + Rs. 18,000 = Rs. 83,650 Summary Method Cost of Materials Issued Closing Inventory Value FIFO Rs. 83,000 Rs. 8,000 Moving Avg Rs. 83,650 Rs. 7,200 Q.2 Gujrat Fan Manufacturing Industry has received a special order for manufacturing and supply of 250 specially designed bracket fans of A Grade. The following costs were incurred by the company for execution of the order: Direct material cost Rs. 50,000 Direct labour cost Rs. 150,000 Factory Overhead is applied at 60% of direct labour cost. After completion of the production, it was noticed during testing by the Quality Control Department that 30 fans were found technically defective for which the following additional costs were incurred in order to remove the defects: - Direct material cost Rs. 2,400 Direct labour cost Rs. 6,000 Factory overhead applied at 60% of direct labour cost. Required: Prepare necessary general journal entries to record execution of the special order in the following prospects: - Skilling. Stamflay.com ‘a 2 . x xe BEAK TK TE IK IK EK IK IE SK IK OE Sea EE JOO III III I IIIFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE FEE SK IK IK IK SE IE EE I IK SK IK IEE 3K 0314-4646739 0332-4646739 0336-4646739 a) When relevnt job is charged with the additional cost of defective works. b) When the relevant Job is not charged with the additional cost of defective works. To record the execution of the special order for Gujrat Fan Manufacturing Industry, we need to prepare general journal entries under the given scenarios: Scenario A: Relevant Job is Charged with the Additional Cost of Defective Works Step 1: Record initial production costs 1. Direct Material Cost: Dr. Work in Process ~ Job (Special Order) Rs. 50,000 Cr. Raw Materials Inventory Rs. 50,000 2. Direct Labour Cost: Dr. Work in Process — Job (Special Order) Rs. 150,000 Cr. Wages Payable Rs. 150,000 3. Factory Overhead Applied: Factory overhead is 60% of direct labour cost: —150,000«0.6=90,000150,000 \times 0.6 = 90,0001 50,000%0.6=90,000 Dr. Work in Process — Job (Special Order) Rs. 90,000 Cr. Factory Overhead Applied Rs. 90,000 Step 2: Record additional costs for defective fans 1. Direct Material Cost: Dr. Work in Process — Job (Special Order) Rs. 2,400 Cr. Raw Materials Inventory Rs. 2,400 2. Direet Labour Cost: Dr. Work in Process — Job (Special Order) Rs. 6,000 Cr. Wages Payable Rs. 6,000 3. Factory Overhead Applied: Factory overhead is 60% of additional direct labour cost: 6,000x0.6=3,6006,000 \times 0.6 = Skilling.pk Stamflay.com 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OE KKK IK BGI OIOIIR I III I Ie IIDEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE x * cS FEE SK IK IK IK TE IE EE IK IK IK 3K 0314-4646739 0332-4646739 0336-4646739 3,6006,000x0.6=3,600 Dr. Work in Process — Job (Special Order) Rs. 3,600 Cr. Factory Overhead Applied Rs. 3,600 Step 3: Completion of Jab 1. Transfer total costs to Finished Goods: Total costs = Rs. 50,000 + Rs, 150,000 + Rs. 90,000 + Rs. 2,400 + Rs. 6,000 + Rs, 3,600 = Rs. 302,000 Dr. Finished Goods Inventory Rs, 302,000 Cr. Work in Process ~ Job (Special Order) Rs. 302,000 Scenario B: Relevant Job is Not Charged with the Additional Cost of Defective Works Step 1: Record initial production costs (Same as Scenario A, Step 1) Step 2: Record additional costs for defective fans 1. Direct Material Cost: Dr. Factory Overhead Control Rs. 2.400 Cr. Raw Materials Inventory Rs. 2,400 2. Direet Labour Cost: Dr, Factory Overhead Control Rs. 6,000 Cr. Wages Payable Rs. 6,000 3. Factory Overhead Applied: Factory overhead is 60% of additional direct labour cost: 6,000*0.6=3,6006,000 \times 0.6 = 3,6006,000%0.6=3,600 Dr. Factory Overhead Control Rs. 3,600 Cr. Factory Overhead Applied Rs. 3,600 Step 3: Completion of Job Skilli Stamflay.com ling.pk Diya.pk SEI SII ESIC IORI ICSI IESE OR SIC IE IOI SISSIES HEISE 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OEFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE HIKE SEI IK TK IK SK TE IE IE IE IE SE SE SE SE DIE SIC SKE SKE IKE KE SE SIE SIE SE SIE SIE SIE SE SE SE 0314-4646739 0332-4646739 0336-4646739 1. Transfer total costs to Finished Goods: Total costs (excluding additional costs) = Rs. 50,000 + Rs. 150,000 + Rs. 90,000 = Rs. 290,000 Dr. Finished Goods Inventory Rs. 290,000 Cr. Work in Process — Job (Special Order) Rs. 290,000 Summary of Journal Entries Scenario A: Charged with Defective Costs Account Debit (Rs.) Credit (Rs.) Work in Process — Job 50,000 50,000 Raw Materials Inventory 50,000 Work in Process — Job 150,000 150,000 Wages Payable 150,000 Work in Process — Job 90,000 90,000 Factory Overhead Applied 90,000 Work in Process — Job 2,400 2,400 Raw Materials Inventory 2,400 Work in Process — Job 6,000 6,000 Wages Payable 6,000 Work in Process — Job 3,600 3,600 Factory Overhead Applied 3,600 Finished Goods Inventory 302,000 302,000 Work in Process — Job 302,000 Skilling.pk Stamflay.com 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OE KK 3K 3K BGI OIOIIR I III I Ie IIFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE *x K cS DEIR IK IK IK AE IE IE SE OE SK IK IK IK IK 0314-4646739 0332-4646739 Scenario B: Not Charged with Defective Costs Account Work in Process — Job Raw Materials Inventory Work in Process — Job Wages Payable Work in Process — Job Factory Overhead Applied Factory Overhead Control Raw Materials Inventory Factory Overhead Control Wages Payable Factory Overhead Control Factory Overhead Applied Finished Goods Inventory Work in Process — Job Q3 a. Describe the functions of a Time keeping department and various methods used for controlling the attendance of workers in a factory. Skillin Debit (Rs.) 50,000 150,000 90,000 2,400 6,000 3,600 290,000 0336-4646739 Credit (Rs.) 50,000 50,000 150,000 150,000 90,000 90,000 2,400 2,400 6,000 6,000 3,600 3,600 290,000 290,000 Stamflay.com pk KKK IK LS ek a ae I eR EK EK ICR CS 3 3 * * * x * * 3K BEE IK TE IK IK SE IK IK SK SK SK SK 3K SEDEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE 0314-4646739 0332-4646739 0336-4646739 b. A pharmaceutical company is considering introducing Halsey Premium or Rowan Plan of incentives scheme for their employees. The standard time of production is 10 hours and the Hourly rate is Rs. 100. In order to carry out a comparative study that which of the two incentive plans is cost effective for payment of wages to workers, the company estimates that the time taken for production of a Batch may be 9 Hours, 8 Hours and 7 Hours. Required: Advise the company for adopting suitable incentive plan supported by workings and total labor cost per Hour under each incentive plan of Halsey Premium and Rowan. Part A: Functions of the Time-Keeping Department The Time-Keeping Department is a crucial part of a factory’s operations, ensuring accurate tracking of workers’ attendance, work hours, and overtime. Its functions include: 1. Recording Attendance: Ensures that the attendance of workers is accurately recorded at the beginning and end of shifts. 2. Monitoring Overtime: Tracks extra hours worked by employees for calculating additional wages. 3. Ensuring Punctuality: Helps maintain discipline by discouraging late arrivals and early departures. 4. Facilitating Payroll Processing: Provides accurate data on worked hours for calculating wages and incentives. 5. Compliance with Labor Laws: Ensures that working hours and overtime adhere to labor regulations. 6. Monitoring Absentecism: Identifies patterns of absenteeism to address workforce efficiency. Methods for Controlling Attendance Skillin Stamflay.com BEAK TK TE IK IK EK IK IE SK IK OE HIKE IK BGI OIOIIR I III I Ie IIDEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE 0314-4646739 0332-4646739 0336-4646739 HIKE on a register. which records their check-in and check-out times. recognition to record attendance. machines to log attendance supervisors, often used in smaller factories. 1. Halsey Premium Plan Under the Halsey Premium Plan + Incentive = 50% of the time saved. Formula for Total Wages: Total Wages = (‘Time Taken x Hourly Rate) (Bessette) Where: Time Saved = Standard Time — Time Taken 2. Rowan Plan Urder the Rowan Pan «the workers pat @ guaranteed tme-rate wage forthe time taken, Incentive = Time Saved x Pine Talen < Hourly Rate. Seaudaad Tue * Formula for Total Wages: ‘Lotal Wages = (‘Time Taken x Hourly Rate) + (time Saved x time Taken SEI IK TK IK SK TE IE IE IE IE SE SE SE SE DIE SIC SKE SKE IKE KE SE SIE SIE SE SIE SIE SIE SE SE SE Standard Time Manual Attendance Register: Workers manually sign in and out 2. Time Cards: Workers punch a card into a time-clock machine, 3. Biometric Systems: Automated systems using fingerprints or facial 4. Digital Swipe Cards: Employees swipe a card at designated 5. Supervisor Monitoring: Manual verification of attendance by Part B: Comparative Study of Halsey Premium Plan and Rowan Plan + The worker is paid a guaranteed time-rate wage for the time taken. » Hourly Rate) Skilling.pk Stamflay.com KK 3K 3K BGI OIOIIR I III I Ie II 3 3 * * * x * * 3K * BEAK TK TE IK IK EK IK IE SK IK OEFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE *x K cS DEIR IK IK IK AE IE IE SE OE SK IK IK IK IK 0314-4646739 0332-4646739 Workings Time Taken Standard Time Hourly Rate Time Saved (Hours) (Hours) (Rs) (Hours) 9 10 100 1 8 70 400 2 1 10 100 3 Total Labor Cost Per Hour Time Taken (Hours) Halsey Cost/Hour (Rs.) 9 2 — 105.56 8 sw = 112.50 7 21.43 Analysis and Recommendation + Halsey Premium Plan: Becomes more cost-effective as the time taken decreases because the incentive is fixed at 50% of the time saved. + Rowan Plan: Incentive increases with efficiency but becomes more expensive at lower production times. Recommendation: The Halsey Premium Plan is more cost-effective for the company if cost minimization is the primary goal. However, the Rowan Plan could be more motivating for workers, as it provides higher incentives for greater efficiency. Q.4 The following data has been extracted from the record of 0336-4646739 Halsey Wages (Rs) 900 } 50 = 950 800+ 100 = 900 700 + 150 = 850 Rovan Wages (Rs) 900} 90 = 990 800+ 160 = 980 700+ 210= 910 Rowan Cost/Hour (Rs.) = 110.00 2m = 120.00 22 = 130.00 Basharat Production Industries for the year 2014: - Skillin Stamflay.com pk KKK IK BGI OIOIIR I III I Ie II 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OEDEDEDE DE FE DIE IE DE IE FE DIE IK FE FE IE DE DIE DICK DK DIE FE DK DIE IK FE IE x * cS FEE SK IK IK IK TE IE EE IK IK IK 3K SKIKE TK IE EK EK 0314-4646739 0332-4646739 0336-4646739 a) Budgeted factory overheads Rs 500,000 b) Actual factory overheads Rs.455,000 c) Budgeted machine hours 12,500 hours d) Actual machine hours 12,000 hours Required Work out the following: - a) Predetermined overhead absorption rate per machine hour. b) Applied overhead cost. c) Over or under absorbed factory overhead cost. Solution To solve the problem, let’s calculate the required components step-by- step: a) Predetermined Overhead Absorption Rate Per Machine Hour Formula: Budgeted Factory Overheads Predetermined Overhead Rate = py cted Machine Flours Substituting the given values. 500,000 Predetermined Overhead Rate = . o Rate = 35, 500 = 40 Rs. per Machine Hour b) Applied Overhead Cost Formula: Applied Overhead Cost = Predetermined Overhead Rate x Actual Machine Hours Substituting the values: Applied Overhead Cost = 40 x 12, 000 = 480, 000 Rs. Skilli Stamflay.com ling.pk Diya.pk SEI SII ESIC IORI ICSI IESE OR SIC IE IOI SISSIES HEISE 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OEFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE *x K cS DEIR IK IK IK AE IE IE SE OE SK IK IK IK IK 0314-4646739 0332-4646739 0336-4646739 c) Over or Under Absorbed Factory Overhead Cost Formula: Over or Under Absorbed Overheads = Applied Overhead Cost — Actual Factory Overheads Substituting the values: Over or Under Absorbed Overheads = 480,000 — 455,000 = 25, 000 Rs. (Overabsorbed) Summary of Results 1. Predetermined Overhead Rate: Rs. 40 per machine hour. 2. Applied Overhead Cost: Rs. 480,000. 3. Overabsorbed Factory Overhead Cost: Rs. 25,000. This indicates that the company allocated more overheads than were actually incurred by Rs. 25,000. Q.5 Wilson Pharmaceutical Company uses the direct method of allocating servicing departments overhead costs to the producing departments. The following data is available concerning the activities: - Particulars Producing Department | Servicing Department ra " e Procuremen Factory Mixing | Finishing H ary Budget FOH cost Tintin Rs. 304,000 | Rs. 100,000 | Rs. 50,000 Number of Employees 90 210 20 28 Machine Hours 64,000 16,000 = = Direct Labour Hours 35,000 100,000 _ - The costs of Procurement Department are allocated on the basis of number of employees while the costs of Factory Administration are prorated on the basis of machine hours. Skilling.pk Stamflay.com 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OE KKK IK BGI OIOIIR I III I Ie IIFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE DIK IK IK IK AE IE IE SE IE I SK I IK IK IE SE SE 0314-4646739 0332-4646739 0336-4646739 REQUIRED 1) Prepare a statement of overhead cost allocation. 2) Calculate predetermined overhead rates for each of the producing departments on the basis of machine hours for the mixing department while direct labour hours for the finishing department. Solution Step 1: Statement of Overhead Cost Allocation Using the Direct Method The direct method involves allocating the overhead costs of servicing departments (Procurement and Factory Admin) directly to the producing departments (Mixing and Finishing), without any reciprocal allocation between the servicing departments. Stop 1A: Allocation of Procurement Department Costs Procurement costs are alocated based on the number of employees in each department. Forenulaz Number of Employees in Department Allocated Cost = ae x Procurement Department Costs Total Number of Employees: 90(Mixing) + 210(Finishing) + 20(Procurement) + 28(Factory Admin) = 348 Procurement Department Costs Allocation: |, Mixing Department 90 7 gag * 100,000 25,802.07 2. Finishing Department: 210 x I = 60, 344.83 ag * 100; 000 = 60, 344.83 Skilling.pk Stamflay.com 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OE KKK IK BGI OIOIIR I III I Ie IIFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE HIKE SEI IK TK IK SK TE IE IE IE IE SE SE SE SE DIE SIC SKE SKE IKE KE SE SIE SIE SE SIE SIE SIE SE SE SE 0314-4646739 0332-4646739 0336-4646739 Step 1B: Allocation of Factory Administration Department Costs Factory Administration costs are allocated based on machine hours. Total Machine Hours: 64, 000(Mixing) + 16, 000(Finishing) — 80,000 Machine Hours Factory Admin Department Costs Allocation: 1. Mixing Department: 64,000 30-000 * 50-000 = 40,000 2. Finishing Department: 16,000 50-000 * 50-000 = 10,000 Step 1C: Total Overhead Allocation to Producing Departments Now, let's add the allocated costs to the departments’ original budgeted overhead costs. Budgeted FOH Procurement Factory Admin Total Ovethead Department Cost Allocated Allocated Cost Mixing Rs, 410,000, Rs, 2586207 Rs. 40,000 Rs, 47586207 Finshing Rs, 304,000 Rs, 60344.83 Rs. 14000 Rs, 37434403 Step 2: Predetermined Overhead Rates for Producing Departments Predetermined overhead rate is calculated by dividing the total overhead cost by the base (machine hours for Mixing and direct labor hours for Finishing). Skilling.pk Stamflay.com 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OE KK 3K 3K BGI OIOIIR I III I Ie IIFE IE IE IE DHE IIE DIE IE IE DIE IC DIE IK DIE DE DIC DE DIE DK IK DIE IE DIC 3K DIC IC IE HIKE SEI IK TK IK SK TE IE IE IE IE SE SE SE SE DIE SIC SKE SKE IKE KE SE SIE SIE SE SIE SIE SIE SE SE SE 0314-4646739 0332-4646739 0336-4646739 Mixing Department: Base: Machine hours = 64,000 Total Overhead Cost: Rs. 475,062.07 Formula: ‘Total Overhead Cost Predetermined Overhead Rate a 475, 862.07 Predetermined Overhead Rate for Mixing = rredetermined Overhead Rate for Mixing = ~5 59 = 7.44 per machine hour Finishing Department: Base: Direct labor hours = 100,000 Total Overhead Cost Rs. 374,544.63 Formula: Total Overhead Cost Direct Labour Hours 374,344.53 100, 000, Predetermined Overhead Rate = Predetermined Overhead Rate for Finishing = = 3.74 per direct labor hour Summary of Results: 1. Overhead Cost Allocation: » Mixing Department Total Overhead: Rs. 475,862.07 c Finishing Department Total Overhead: Rs. 374,344.83 2. Predetermined Overhead Rates: c Mixing Department: Rs. 7.44 per machine hour c Finishing Department: Rs. 3.74 per direct labor hour Skilling.pk Stamflay.com KK 3K 3K BGI OIOIIR I III I Ie II 3 3 * * * x * * 3K BEAK TK TK OK I EK IK IE SK SK OK 3K OE