Taman Astakona Sdn. Bhd. has prepared department overhead budgets for budgeted- volume levels before cost allocation for year ended 31 December 2021 as follows: Service Department: Building General Administration Sales and Distribution Operating Department: Gardening Landscaping Total for service and operating departments Required: a) The management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after service department costs are allocated to operating departments. Department Building General Administration Sales and Distribution Gardening Landscaping Building department costs is distributed based on square feet of floor space occupied General Administration department costs is distributed based on number of employees and Sales and Distribution department costs are based on number of requisitions. Bases for allocating cost are to be selected from the following: Direct labor- hours 5,000 15,000 RM Number of employees 50,000 30,000 26,090 20 15 20 30 50 64,700 48,900 219,690 Square feet of floor space occupied 6,000 4,500 5,500 15,000 50,000 Number of Requisitions 100 50 60 4,000 8,000 Allocate the service departments' costs to the operating departments using the direc method. Compute overhead application rates per direct labor hour for Gardening and Landscaping.
Taman Astakona Sdn. Bhd. has prepared department overhead budgets for budgeted- volume levels before cost allocation for year ended 31 December 2021 as follows: Service Department: Building General Administration Sales and Distribution Operating Department: Gardening Landscaping Total for service and operating departments Required: a) The management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after service department costs are allocated to operating departments. Department Building General Administration Sales and Distribution Gardening Landscaping Building department costs is distributed based on square feet of floor space occupied General Administration department costs is distributed based on number of employees and Sales and Distribution department costs are based on number of requisitions. Bases for allocating cost are to be selected from the following: Direct labor- hours 5,000 15,000 RM Number of employees 50,000 30,000 26,090 20 15 20 30 50 64,700 48,900 219,690 Square feet of floor space occupied 6,000 4,500 5,500 15,000 50,000 Number of Requisitions 100 50 60 4,000 8,000 Allocate the service departments' costs to the operating departments using the direc method. Compute overhead application rates per direct labor hour for Gardening and Landscaping.
Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter2: Basic Cost Management Concepts
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Problem 31P: The actions listed next are associated with either an activity-based operational control system or a...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:b)
Based on the following information about two jobs, determine the total costs for each
job by using rates developed in (a).
Job number
No. 100
No. 200
Direct labor Hour
Gardening
15
5
Landscaping
4
13
Transcribed Image Text:Taman Astakona Sdn. Bhd. has prepared department overhead budgets for budgeted-
volume levels before cost allocation for year ended 31 December 2021 as follows:
Service Department:
Building
General Administration
Sales and Distribution
Operating Department:
Gardening
Landscaping
Total for service and operating departments
The management has decided that the most appropriate inventory costs are achieved by
using individual department overhead rates. These rates are developed after service
department costs are allocated to operating departments.
Department
Building
General Administration
Sales and Distribution
Gardening
Landscaping
Building department costs is distributed based on square feet of floor space occupied.
General Administration department costs is distributed based on number of employees and
Sales and Distribution department costs are based on number of requisitions.
Bases for allocating cost are to be selected from the following:
Number of
employees
Required:
a)
Direct labor-
hours
RM
5,000
15,000
50,000
30,000
26,090
20
15
20
30
50
64,700
48,900
219,690
Square feet of
floor space
occupied
6,000
4,500
5,500
15,000
50,000
Number of
Requisitions
100
50
60
4,000
8,000
Allocate the service departments' costs to the operating departments using the direct
method. Compute overhead application rates per direct labor hour for Gardening and
Landscaping.
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