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Cost Accounting Overhead Analysis Sheet

The document contains a table that allocates overhead costs across four departments (A, B, C, and D) based on factors like number of employees, machine horsepower, floor space, and asset values. It provides formulas for allocating costs for items like national insurance, rent, repairs, heating/lighting, power, insurance of stock, medical costs, and depreciation based on department's proportion of the total for each factor. Workings are shown applying the formulas to allocate the total overhead costs of $16,600 among the four departments.

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Marc Wright
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678 views4 pages

Cost Accounting Overhead Analysis Sheet

The document contains a table that allocates overhead costs across four departments (A, B, C, and D) based on factors like number of employees, machine horsepower, floor space, and asset values. It provides formulas for allocating costs for items like national insurance, rent, repairs, heating/lighting, power, insurance of stock, medical costs, and depreciation based on department's proportion of the total for each factor. Workings are shown applying the formulas to allocate the total overhead costs of $16,600 among the four departments.

Uploaded by

Marc Wright
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Question A

Overheads Basis Dept. A Dept. B Dept. C Service Total


Department
Dept. D
Indirect ALL 4,000.00 3,000.00 3,500.00 2,500.00 13,000.00
Wages
National Number of 260.00 156.00 195.00 169.00 780.00
Insurance employees
Rent and Area in 200.00 160.00 140.00 100.00 600.00
Rates square feet
Repairs to Book 200.00 240.00 120.00 40 600.00
Plant and Value of
Machinery Plant and
Machinery
Heating and Horse 128.00 102.00 59.00 11.00 300.00
Lighting Power of
Machine
Power Horse 240.00 190.00 110.00 20.00 560.00
Power of
Machine
Insurance of Average 140.00 105.00 105.00 0 350.00
Stock Stock
Value
Medical Number of 6.70 4.00 5.00 4.30 20.00
Costs Employees
Depreciation Book 150.00 180. 90.00 30.00 450.00
of Plant and Value of
Machinery Plant and
Machinery
Total 5324.70 4137.00 4,324.00 2,874.30 16,600.00

Workings
National Insurance: 780
Total Number of Employees = 20+12+15+13 = 60
Dept. A = 780*(20/60) = 260
Dept. B = 780*(12/60) = 156
Dept. C = 780 *(15/60) = 195
Dept. D = 780*(13/60) = 169
Rent and Rates: 600
Formula = Rent *(Area Sq. Feet of Dept. / total Area Sq. Feet)
Total Area Sq. Feet = 10 000 + 8 000 + 7 000 + 5 000 = 30 000
Dept. A = 600*(10000/30000) = 200
Dept. B = 600*(8 000/30 000) = 160
Dept. C = 600 * (7 000/30 000) = 140
Dept. D = 600 * (5 000/30 000) = 100

Repairs to Plant and Machinery: 600


Formula = Repairs *(Book Value of Dept. / Total Book Value)
Total Book Value = 10 000 + 12 000 + 6 000 + 2 000 = 30 000
Dept. A = 600*(10 000/30 000) = 200
Dept. B = 600*(12 000/30 000) = 240
Dept. C = 600 * (6000/30000) = 120
Dept. D = 600 * (2000/30000) = 40

Heating and Lighting = 300


Formula = Heating and lighting cost * (Horsepower of machines for each dept. / Total
Horsepower)
Total Horse power of machines = 120 + 95 + 55 + 10 = 280
Dept. A = 300 * (120/280) =128
Dept. B = 300 * (95/280) = 102
Dept. C = 300 * (55/280) = 59
Dept. D = 300 * (10/280) = 11

Power
Formula = Power *(Horsepower of machines for each dept. / Total Horsepower)
Total Horse power of machines = 120 + 95 + 55 + 10 = 280
Dept. A = 560 * (120/280) = 240
Dept. B = 560 * (95/280) = 190
Dept. C = 560 * (55/280) = 110
Dept. D = 560 * (10/280) = 20

Insurance of Stock
Formula =
Insurance of stock cost * (Average Stock Value of each dept. / Total Average Stock Value)
Total Average Stock Value = 2 000 + 1 500 + 1 500 = 5 000
Dept. A = 350 * (2 000/5 000) = 140
Dept. B = 350 * (1 500/5 000) = 105
Dept. C = 350 * (1 500/5 000) = 105
Dept. D = 0

Medical Costs = 20
Total Number of Employees = 20+12+15+13 = 60
Dept. A = 20*(20/60) = 6.7
Dept. B = 20*(12/60) = 4
Dept. C =20 *(15/60) = 5
Dept. D = 20*(13/60) = 4.3

Formula = Depre. Of Plant and Machinery *(Book Value of Dept. / Total Book Value)
Total Book Value = 10 000 + 12 000 + 6 000 + 2 000 = 30 000
Dept. A = 450 * (10 000/30 000) = 150
Dept. B = 450 * (12 000/30 000) = 180
Dept. C = 450 * (6000/30000) = 90
Dept. D = 450 * (2000/30000) = 30

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