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4 Soln of OH Q1 To Q 4

The document summarizes the apportionment of overhead costs to different departments of Cadila Co. for the half year ended 30th September 2020. Total overhead costs amounted to Rs.27,400 which were apportioned to production departments A and B, and service departments X, Y and C based on different allocation bases like direct wages, electricity consumption, floor space occupied etc. Secondary apportionment was also done to distribute some overhead costs further to the departments.

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43 views20 pages

4 Soln of OH Q1 To Q 4

The document summarizes the apportionment of overhead costs to different departments of Cadila Co. for the half year ended 30th September 2020. Total overhead costs amounted to Rs.27,400 which were apportioned to production departments A and B, and service departments X, Y and C based on different allocation bases like direct wages, electricity consumption, floor space occupied etc. Secondary apportionment was also done to distribute some overhead costs further to the departments.

Uploaded by

medha sur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Books of Cadila Co.

Apportionment of Costs to Departments on Equitable Basis

Departments Production Service


Expenses Rs Basis A B C D
Rent & Rates 5000 Floor Space 1000 1250 1500 1000
Indirect Wages 1500 Direct Wages 450 300 450 225
Dep of Machinery 10000 Value of Machinery 2400 3200 4000 200
General Lighting 600 Light Points 100 150 200 100
Power 1500 HP of machines 600 300 500 100
Sundries 10000 Direct Wages 3000 2000 3000 1500
Total 28600 7550 7200 9650 3125

10000
2,3 5

4000 6000

\
Service
E
250
75
200
50
0
500
1075
Books of Cadila Co.
Apportionment of Costs to Departments on Equitable Basis

Departments Production Service


Expenses Rs Basis A B C D
Rent & Rates 5000 Floor Space 1000 1250 1500 1000
Indirect Wages 1500 Direct Wages 450 300 450 225
Dep of Machinery 10000 Value of Machinery 2400 3200 4000 200
General Lighting 600 Light Points 100 150 200 100
Power 1500 HP of machines 600 300 500 100
Sundries 10000 Direct Wages 3000 2000 3000 1500
Total 28600 7550 7200 9650 3125

Particulars Total A B C D
Floor Space Sq ft 10000 2000 2500 3000 2000
RATIO 20 4 5 6 4

Light Points No 60 10 15 20 10
RATIO 12 2 3 4 2

Direct Wages Rs 10000 3000 2000 3000 1500


RATIO 20 6 4 6 3

HP of machines No 150 60 30 50 10
RATIO 15 6 3 5 1

Value of Machinery Rs 250000 60000 80000 100000 5000


RATIO 50 12 16 20 1

1000 \ 5000

2000 2500 3000


1000

9000 2;3
Service
E
250
75
200
50
0
500
1075

E
500
1

5
1

500
1

5000

2000 500 10000


Books of Glaxo Co.
Overhead Distribution Summary for half year ended 30th Sep, 2020

Departments Production
Expenses Rs Basis A B
Primary Distribution
Direct Materials (Note 1) 2500 0 0
Direct Wages (Note 1) 2000 0 0
Stores OH 400 Direct Materials 120 100
Motive Power 1500 Electricity 480 360
Electric Lighting 200 Light Points 40 60
Labour Welfare 3000 Employees 1000 750
Depreciation 6000 Asset Values 2500 1500
Repairs & Maintenance 1200 Asset Values 500 300
General OH 10000 Direct Wages 3500 3000
Rent & Taxes 600 Area Occupied 200 150
Total 27400 8340 6220
Secondary Distribution
Apportion X to A:B:C in 4:3:3 Given 1640 1230
Apportion Y to A:B:C in 7:6:5 Direct Wages 1416 1213
Grand Total 27400 11396 8663

Note 1
Direct Materials & Direct Wages are considered only of Service Departments and not of Production because both ar
roduction Service
C X Y

0 1500 1000
0 1000 1000
80 60 40
360 120 180
60 20 20
750 250 250
1000 500 500
200 100 100
2500 500 500
150 50 50
5100 4100 3640

1230 -4100
1011 -3640
7341 0 0

Production because both are Overheads of Service & not Production Departments
Q 2 . APPORTIONMENT TO PRODUCTION DEPARTMENT ONLY
Books of Glaxo Co.
Overhead Distribution Summary for half year ended 30th Sep, 2020

Departments Production
Expenses Rs Basis A B
Primary Distribution
Direct Materials (Note 1) 2500 0 0
Direct Wages (Note 1) 2000 0 0
Stores OH 400 Direct Materials 120 100
Motive Power 1500 Electricity 480 360
Electric Lighting 200 Light Points 40 60
Labour Welfare 3000 Employees 1000 750
Depreciation 6000 Asset Values 2500 1500
Repairs & Maintenance 1200 Asset Values 500 300
General OH 10000 Direct Wages 3500 3000
Rent & Taxes 600 Area Occupied 200 150
Total 27400 8340 6220

Secondary Distribution
Apportion X to A:B:C in 4:3:3(given) 4100 Given 1640 1230
Apportion Y to A:B:C in 7:6:5 3640 Direct Wages 1416 1213
Grand Total 11396 8663

Note 1
Direct Materials & Direct Wages are considered only of Service Departments and not of Production because both ar

Particulars Total Production Departments

A B
Direct Wages Rs. 20000 7000 6000
Direct Materials Rs. 10000 3000 2500
Employees Nos. 600 200 150
Electricity Kwh. 25000 8000 6000
Light Points Nos. 50 10 15
Asset Values Rs. 120000 50000 30000
Area Occupied Sq yrds 2400 800 600

10 4 3

Direct Wages 18000 7000 6000


18 7 6
30th Sep, 2020

roduction Service
C X Y

0 1500 1000
0 1000 1000
80 60 40
360 120 180
60 20 20
750 250 250
1000 500 500
200 100 100
2500 500 500
150 50 50
5100 4100 3640

1230 -4100
1011 -3640
7341 0 0

ot of Production because both are Overheads of Service & not Production Departments

Service
on Departments
Departments
C X Y
5000 1000 1000
2000 1500 1000
150 50 50
6000 2000 3000
15 5 5
20000 10000 10000
600 200 200

5000
5
Q 3. APPORTIONMENT TO PRODUCTION AS WELL AS SERVICE DEPARTMENTS
NON RECIPROCAL DISTRIBUTION (STEP LADDER METHOD)

Overhead Distribution Summary

Departments Production
Expenses Rs Basis A
Primary Distribution
Depreciation 190000 Assets 100000
Rent & rates 36000 Floor space 15000
Insurance (Note 1) 15200 Assets 8000
Power 20000 HP of machines 10000
Canteen Expenses 10800 No. of workers 4800
Electricity 4800 Light Points 2000
Total 276800 139800

Secondary Distribution
Apportion services of X to Y Given
Apportion balance services of X to A: B in 3:2 Given 18360

Apportion services of Y to A: B in 9:1 Given 28620


Grand Total 276800 186780

Note 1
Insurance is assumed to be of Assets hence, that is taken as basis. Alternatively, it can be assumed of Space & can be
Note 2
Figures are rounded off wherever in decimals
Production Service
B X Y

50000 30000 10000


12000 3000 6000
4000 2400 800
5000 4000 1000
2400 2400 1200
1200 800 800
74600 42600 19800

-12000 12000
12240 -30600
0 31800

3180 -31800
90020 0 0

assumed of Space & can be taken Floor Spaces basis too


Q 3. APPORTIONMENT TO PRODUCTION AS WELL AS SERVICE DEPARTMENTS (2 service depts)
NON RECIPROCAL DISTRIBUTION (STEP LADDER METHOD)

Overhead Distribution Summary

Departments Production
Expenses Rs Basis A
Primary Distribution
Depreciation 190000 Assets 100000
Rent & rates 36000 Floor space 15000
Insurance (Note 1) 15200 Assets 8000
Power 20000 HP of machines 10000
Canteen Expenses 10800 No. of workers 4800
Electricity 4800 Light Points 2000
Total 276800 139800

Secondary Distribution
Apportion services of X to Y Given
Apportion balance services of X to A: B in 3:2 Given 18360

Apportion services of Y to A: B in 9:1 Given 28620


Grand Total 276800 186780

Note 1
Insurance is assumed to be of Assets hence, that is taken as basis. Alternatively, it can be assumed of Space & can be
Note 2
Figures are rounded off wherever in decimals

Particulars Total A
Floor Space (sq ft)/Area occupied 12000 5000
Assets (Rs. In lacs) 19 10
HP of machines 2000 1000
No. of workers 225 100
Light Points 120 50
S (2 service depts)

Production Service
B X Y

50000 30000 10000


12000 3000 6000
4000 2400 800
5000 4000 1000
2400 2400 1200
1200 800 800
74600 42600 19800

-12000 12000 given


12240 -30600 42600
0 31800

3180 -31800
90020 0 0

assumed of Space & can be taken Floor Spaces basis too

B X Y
4000 1000 2000
5 3 1
500 400 100
50 50 25
30 20 20
Q 4. APPORTIONMENT TO PRODUCTION AS WELL AS SERVICE DEPARTMENTS (More than 2 service de
NON RECIPROCAL DISTRIBUTION (STEP LADDER METHOD)

Overhead Distribution Summary

Departments
Expenses Rs Basis
Primary Distribution Given
OH Distribution 38000
Total 38000
Secondary Distribution
Apportion Time Keeping Department to other Departments 4000 No. of Employees
Apportion Stores to other Departments 5000 No. of St Req
Apportion Balance Stores to other Departments 667 No. of St Req
Apportion Maintenance to other Departments 3000 Machine Hours
Apportion Balance Maintenance to other Departments 1097

Grand Total 38000

Note 1
Figures are rounded off wherever in decimals
More than 2 service depts)

Production Service
X Y Time Stores Maintn

16000 10000 4000 5000 3000


16000 10000 4000 5000 3000

1667 1250 -4000 667 417


2400 2000 0 -5000 600
320 267 0 -667 80
1800 1200 0 0 -3000
658 439 -1097

22845 15155 0 (0) (0)


Q 4. APPORTIONMENT TO PRODUCTION AS WELL AS SERVICE DEPARTMENTS (More than 2 serv
NON RECIPROCAL DISTRIBUTION (STEP LADDER METHOD)

Overhead Distribution Summary


PARTICULARS

Expenses   Rs

Primary Distribution
OH Distribution 38000
Total 38000

Secondary Distribution
Apportion Time Keeping Department to other Departments 4000

Apportion Stores to other Departments 5667

Apportion Maintenance to other Departments 4096

Grand Total 38000

Note 1

Figures are rounded off wherever in decimals

PARTICULARS

No. of Employees
No. of Stores requisitions
Machine Hours
DEPARTMENTS (More than 2 service depts)

ead Distribution Summary


Departments
Production Service
Basis X Y Time- Stores Maintenance
Keeping

Given
16000 10000 4000 5000 3000
Given 16000 10000 4000 5000 3000

No. of Employees 1667 1250 -4000 667 416

No. of Stores requisition 2720 2267 0 -5667 680

Machine Hours 2458 1638 0 0 -4096

22844 15155 0 0 0

Production
Total Service Departments
Departments
Time-
X Y Stores Maintenance
Keeping

96 40 30 20 16 10 40:30:16:10
50 24 20 - - 6 24:20:06
4,000 2,400 1,600 - - - 24:16:00
1667 5667 2720
1250 2267
667 680
417 5667
4001

40:30:16:10

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