2 Sky Ltd. is a manufacturing company. The production process is divided into two productiondepartments: Assembly and Finishing. There is one service department, the Stores department, which isused only by the Finishing department. The relevant information for the year ahead is as follows:Total Overheads for all the departments:Total (£)300,000200,000500,000ItemDepreciationRentTOTALThe following information is available about each department:Assembly Finishing Stores70,000 25,000 5,000ItemFloor Space(m²)Value ofmachinery (£)Labour hours85,0002,00015,000500Considering this information, which of the following statements is true?a. The Overheads Absorption Rate using labour hours for the Assembly department equals £210.b. The Overheads Absorption Rate using labour hours for the Finishing department equals £210.Oc. Total overheads allocated to the Assembly department equal £105,000 and total overheadsallocated to the Finishing department equal £395,000.d. None of the answers is true.

Depreciation to be allocated to each department based on Value of Machinery. Rent expenses to be…

Sky Ltd. is a manufacturing company. The production process is divided into two production departments: Assembly and Finishing. There is one service department, the Stores department, which is used only by the Finishing department. The relevant information for the year ahead is as follows: Total Overheads for all the departments: Total (E) 300,000 200,000 500,000 Item Depreciation Rent TOTAL The following information is available about each department: Item Assembly Finishing Stores Floor Space 70,000 25,000 5,000 (m²) Value of machinery (E) Labour hours 85,000 2,000 15,000 500 Considering this information, which of the following statements is true? a. The Overheads Absorption Rate using labour hours for the Assembly department equals £210. Ob. The Overheads Absorption Rate using labour hours for the Finishing department equals £210. Oc. Total overheads allocated to the Assembly department equal £105,000 and total overheads allocated to the Finishing department equal £395,000. d. None of the answers is true.

Sky Ltd. is a manufacturing company. The production process is divided into two production departments: Assembly and Finishing. There is one service department, the Stores department, which is used only by the Finishing department. The relevant information for the year ahead is as follows: Total Overheads for all the departments: Total (E) 300,000 200,000 500,000 Item Depreciation Rent TOTAL The following information is available about each department: Item Assembly Finishing Stores Floor Space 70,000 25,000 5,000 (m²) Value of machinery (E) Labour hours 85,000 2,000 15,000 500 Considering this information, which of the following statements is true? a. The Overheads Absorption Rate using labour hours for the Assembly department equals £210. Ob. The Overheads Absorption Rate using labour hours for the Finishing department equals £210. Oc. Total overheads allocated to the Assembly department equal £105,000 and total overheads allocated to the Finishing department equal £395,000. d. None of the answers is true.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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