Practice exam: Twistweave Unit 6

Esme

Twistweave has four departments, Production, Stores, Administration and Sales. When asked to allocate and apportion fixed overheads, would 'other administration overheads' be allocated equally to all four cost centres, or the full cost apportioned to Administration?

Bookworm55

I haven't looked at the question, but I'd be inclined to allocate 'other administration overheads' to Administration rather than apportion them between all four departments. But I would also include a note to that effect. You usually do have a column where you state the basis of your allocation or apportionment.

(ps- you have the words allocate and apportion the wrong way around in your post: apportion means 'to allocate proportionately')

Esme

Oh yeah, silly me!

I will allocate the whole cost to admin.. thanks!

Esme

Does anyone know how to calcualte the cost of direct materials for Task 1.5? Would it be from the stock record card, opening stock (61,000) plus receipts (131,000) less closing stock (70,000) = 61,000?

SandyHood

The opening stock + receipts - closing stock is arithmetically fine, as that should = issues
I'd tend to add up the issues column instead
(In my version there isn't an opening stock value)

.+£41,000
+ £41,600
+ £15,400
+ £58,000
= £156,000

Esme

Ok, simpler than I thought! thank you!