Homework help please

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
BBP old excercise Fitwell Ltd. I have allocated and apportioned overheads and apportioned service cost centre into production cost centres. This gives me total costs for Dept 1 £158,600 and Dept 2 £156,400.
It now asks me to work out overhead absorption rates based on
Budgeted labour hours Dept1 333hrs Dept2 7850hrs
Budgeted machine hours Dept1 6320hrs Dept2 1597hrs
I thought I was dividing the total costs with the above but the figures don't look correct.
Any help please :(

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Homework help please

    Hi Katetiddy,
    with the figures you have provided? it seems that
    dept 1 is Machine intensive, meaning you will divide Dept 1 total by machine hours. I.E
    158,600/6320 = £25 per machine hour.

    The same calculation could be applied to Dept 2 but this department is labour intensive??

    hope this helps?

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Homework help please

    Yes James thank you because they gave four lots of figures thought I had to use them all. I didn't realise I was choosing the best OAR to use for each department perhaps makes me a bit thick but the course is intense at the moment and what you learn in class is different to trying to do exercises.

    Again thanks for your help

    Kate

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