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Top 5 Problems on Overhead with Solutions

| Cost Accounting
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In this article we will discuss about the top five problems on overhead with
their relevant solutions.

Contents:

1. Overhead Problem 1 with Solution

2. Overhead Problem 2 with Solution
3. Overhead Problem 3 with Solution
4. Overhead Problem 4 with Solution
5. Overhead Problem 5 with Solution

Overhead Problem 1:

The following are the figures relating to Cost Centre 10:

Using the above data the following absorption rates could be calculated using
the above formula:

Overhead Problem 2:

S. will Ltd. has two production departments A, B and one service department S.
The actual costs for a period are as follows:

Overhead Problem 3:

Finolex Co. Ltd. has three production departments and four service departments.

The expenses of these departments as per primary distribution summary were

as follows:

The following information is also available in respect of production

departments:

Apportion the cost of various service departments to the production departments.

Solution:

Overhead Problem 4:

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A manufacturing company has two production departments X and Y, and three service
departments, Stores, Time-keeping and Maintenance.

The departmental distribution summary showed the following expenses for

March 1998:

Overhead Problem 5:

The following particulars related to the production department of a factory for

the month of June, 1998:

Cost data of a particular work order carried out in the above department during
June, 1998 are given below:

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Material used 8,000

Direct wages 6,250 Labour hours booked 3,300 Machine hours booked 2,400

What would be the factory cost of the work order under the following methods
of charging overheads:

(i) Direct labour cost rate

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(ii) Machine hour rate and

(iii) Direct Labour hour rate.

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TABLE OF CONTENTS

Overhead Problem 1:
Overhead Problem 2:
Overhead Problem 3:
Overhead Problem 4:
Overhead Problem 5:

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