ECR - Dec 09

emma123

what a yucky paper!

Stuck on task 1.4 - reapportionment q. I usually fly through these kinda questions but for this paper i'm stuck on something

The q is "warehouse and stores expect to issue £25.2 million worth of materials to branded products manufacturing and £16.6 million worth to own label products manufacturing"


Total for warehouse and stores is £785,960

The answers are:
branded products manufacturing - £471,576
own label products manufacturing - £314,384

Now how on earth did they get those two answers do anyone know??

anniebabe

you add the 252000 and 168000 = 42000 and then divide into 785960 multiply like the others. x

Marga

hi emma

25.2 + 16.6 = 41.8 total products

25.2 / 41.8 = 60%
16.6 /41.8 = 40%

Therefore

60% of 785960 = branded products manufacturing - £471,576
40% of 785960 =own label products manufacturing - £314,384

emma123

brilliant! thanks annie and marga

Vince22

I had a go on that paper today. I got really stuck on task 1.6 (b) where you have to post the actual and recovered overheads to accounts. The answer booklet shows the actual overhead posted as a credit entry to the overhead control account. But I've learned that the actual overheads are a debit entry in this account, and the amount absorbed goes on the credit side, then debited to the WIP account. The answer given is really confusing. Can anyone clarify why they've done it that way?

emma123

I've learnt that you always DR the WIP a/c. That help any?

Vince22

Yeah, that's what I normally do. But the question didn't include the WIP account. It said,

Complete the following table to show the journal entries for the absorption of overheads in Quarter 1.

Debit (£) Credit (£)
Overhead absorbed
Under/over absorption
Overhead control account

I've never head of an 'overhead absorbed account', nor and 'under/over absorption account'