Departmental Costs – NBC Institute

ICMA – Nov 2024 – L1 – Q4a – Apportionment of Overheads

Apportion overhead costs across departments based on the most appropriate bases.

Question

: Apportionment of Overheads
The following expenses were estimated for the month of June 2024:

Item	GH¢
Electricity	80,000
Rent	18,000
Property rate	6,000
Insurance premium (office equipment)	15,000
Internet and communication	25,000
Indirect wages	60,000

There are three departments: A, B, and C. The following additional information has been provided:

Department	Area occupied (sq. metres)	Number of customers	Number of employees	Value of office equipment (GH¢)
A	300	700	120	50,000
B	450	600	150	40,000
C	250	500	130	60,000

Required:
Apportion the above overheads using the most appropriate base and determine the total overhead for each department.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Allocation, Departmental Costs, Overhead Apportionment
Level: Level 1

Topic: Cost Segregation and Estimation
Series: Nov 2024

MI – May 2022 – L1 – SB – Q1 – Costing Methods

Prepare an overhead analysis to allocate costs to production and service departments.

Question

A small manufacturing company has three production and two service departments. The following data were extracted from the company’s records:

	Total	Spinning & Weaving	Processing	Finishing	Maintenance	Stores
Rent & Rates (₦)	6,000,000
Electricity (₦)	5,400,000
Canteen Exp (₦)	420,000
Maintenance Exp (₦)	2,780,000				2,780,000
Stores Expenses (₦)	1,431,000					1,431,000
Area Occupied (Sq.m)	12,000	3,500	2,500	3,000	2,000	1,000
Energy Consumed (Kw/h)	10,000	3,000	3,000	2,000	1,500	500
No. of Employees	120	40	20	30	20	10
No. of Requisition	2,700	600	500	790	800	10
Plant Value (₦)	55,600,000	25,000,000	15,000,000	15,000,000	600,000
Apportionment Rate 1	100	35%	30%	30%		5%
Apportionment Rate 2	100	25%	20%	30%	25%

You are required to prepare the overhead analysis allocating and apportioning costs to the three production departments and giving the last four digits from the reciprocal apportionment to the Spinning & Weaving department.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Costing, Departmental Costs, Overhead Allocation
Level: Level 1

Topic: Costing Methods
Series: MAY 2022

ICMA – Nov 2024 – L1 – Q4a – Apportionment of Overheads

Apportion overhead costs across departments based on the most appropriate bases.

Question

: Apportionment of Overheads
The following expenses were estimated for the month of June 2024:

Item	GH¢
Electricity	80,000
Rent	18,000
Property rate	6,000
Insurance premium (office equipment)	15,000
Internet and communication	25,000
Indirect wages	60,000

There are three departments: A, B, and C. The following additional information has been provided:

Department	Area occupied (sq. metres)	Number of customers	Number of employees	Value of office equipment (GH¢)
A	300	700	120	50,000
B	450	600	150	40,000
C	250	500	130	60,000

Required:
Apportion the above overheads using the most appropriate base and determine the total overhead for each department.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Allocation, Departmental Costs, Overhead Apportionment
Level: Level 1

Topic: Cost Segregation and Estimation
Series: Nov 2024

MI – May 2022 – L1 – SB – Q1 – Costing Methods

Prepare an overhead analysis to allocate costs to production and service departments.

Question

A small manufacturing company has three production and two service departments. The following data were extracted from the company’s records:

	Total	Spinning & Weaving	Processing	Finishing	Maintenance	Stores
Rent & Rates (₦)	6,000,000
Electricity (₦)	5,400,000
Canteen Exp (₦)	420,000
Maintenance Exp (₦)	2,780,000				2,780,000
Stores Expenses (₦)	1,431,000					1,431,000
Area Occupied (Sq.m)	12,000	3,500	2,500	3,000	2,000	1,000
Energy Consumed (Kw/h)	10,000	3,000	3,000	2,000	1,500	500
No. of Employees	120	40	20	30	20	10
No. of Requisition	2,700	600	500	790	800	10
Plant Value (₦)	55,600,000	25,000,000	15,000,000	15,000,000	600,000
Apportionment Rate 1	100	35%	30%	30%		5%
Apportionment Rate 2	100	25%	20%	30%	25%

Answer

Find Related Questions by Tags, levels, etc.

Tags: Costing, Departmental Costs, Overhead Allocation
Level: Level 1

Topic: Costing Methods
Series: MAY 2022

Question Tag: Departmental Costs

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ICMA – Nov 2024 – L1 – Q4a – Apportionment of Overheads

Apportion overhead costs across departments based on the most appropriate bases.

MI – May 2022 – L1 – SB – Q1 – Costing Methods

Prepare an overhead analysis to allocate costs to production and service departments.

ICMA – Nov 2024 – L1 – Q4a – Apportionment of Overheads

Apportion overhead costs across departments based on the most appropriate bases.

MI – May 2022 – L1 – SB – Q1 – Costing Methods

Prepare an overhead analysis to allocate costs to production and service departments.

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