Accounting and Finance Management Accounting Computer-Based Exemplars Int 2/Higher 3841

Transcription

1 Accounting and Finance Management Accounting Computer-Based Exemplars Int 2/Higher 3841

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3 Autumn 1998 HIGHER STILL Accounting and Finance Management Accounting Computer-Based Exemplars Overhead Apportionment Int 2/ Higher Support Materials *+,-./

4 This publication may be reproduced in whole or in part for educational purposes provided that no profit is derived from the reproduction and that, if reproduced in part, the source is acknowledged. First published 1998 Higher Still Development Unit PO Box Ladywell House Ladywell Road Edinburgh EH12 7YH Accounting and Finance - Management Accounting - Overhead Apportionment - Int 2/Higher

5 INTRODUCTION Teacher/Lecturer Notes The aim of this pack is to provide exemplar spreadsheet questions for student use. The pack, which targets both Intermediate 2 and Higher Levels, will permit students to gain further experience in the use of spreadsheets. The structured questions in the pack are designed to allow students to progress from Intermediate 2 to Higher where appropriate. The first section of the pack contains the student questions split into separate tasks with exemplar spreadsheet templates and formulae worksheets. The final section contains comprehensive solutions for each question including spreadsheet and formulae worksheets. It is suggested that where software facilities permit, students should be encouraged to print the embedded formulae in preference to completing a formulae worksheet. This pack will be provided on CD ROM to enable users to customise questions to suit their individual client group requirements.

6 Accounting and Finance - Management Accounting - Overhead Apportionment - Int 2/Higher

7 ACCOUNTING AND FINANCE MANAGEMENT ACCOUNTING INTERMEDIATE 2/HIGHER COMPUTER-BASED EXEMPLARS OVERHEAD APPORTIONMENT Accounting and Finance - Management Accounting - Overhead Apportionment - Int 2/Higher

8 Accounting and Finance - Management Accounting - Overhead Apportionment - Int 2/Higher

9 Accounting and Finance Contents Management Accounting Overhead Apportionment QUESTIONS EXERCISE LEVEL PAGE 1 Intermediate Intermediate Intermediate Intermediate 2/Higher 13 5 Intermediate 2/Higher 17 6 Intermediate 2/Higher 21 7 Higher 26 8 Higher 31 9 Higher 36 SOLUTIONS EXERCISE LEVEL PAGE 1 Intermediate Intermediate Intermediate Intermediate 2/Higher 61 5 Intermediate 2/Higher 66 6 Intermediate 2/Higher 72 7 Higher 78 8 Higher 86 9 Higher 94 Accounting and Finance - Management Accounting - Overhead Apportionment - Int 2/Higher

10 Accounting and Finance - Management Accounting - Overhead Apportionment - Int 2/Higher

11 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Abercorn Manufacturing has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 1 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Overhead costs of the Service Department have to be apportioned to the Production Departments on the basis of number of employees. INSTRUCTIONS 1 Load spreadsheet APQ01T1 into your computer and enter your name in cell E1. 2 Using the data above, complete the spreadsheet by entering the appropriate formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ01T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 1 - Task 1) by writing down the appropriate formulae from your spreadsheet. Abercorn Manufacturing is interested to know how the departmental overheads would be affected if the following changes occurred. EXERCISE 1 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) The business decides to introduce more machines, changing the value of fixed assets to: Department A - 80,000 Department B - 20,000 Service Department - unchanged As a result, the depreciation overhead is doubled (b) With new equipment the business decides to expand its premises, changed the floor area percentages to: Department A - 60% Department B - 10% Service Department - 30% As a result, the figure for light and heat is increased to 290 (c) Overhead costs of the Service Department have to be apportioned to the Production Departments on the basis of floor area INSTRUCTIONS 1 Load the amended spreadsheet APQ01T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ01T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 1 - Task 2) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 1

12 Accouting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Q1 TASK A B C D E ABERCORN MANUFACTURING Student Name (a) Basis of Apportionment Apportionment Data Production Production Service TOTAL Dept A Dept B Dept Floor Area 30% 20% 50% 100% Number of Employees Value of Fixed Assets 30,000 10,000 20,000 60,000 (b) Apportionment Overhead Light and Heat 280 Depreciation of Machinery 240 Rent and Rates 700 Repairs to Equipment 1,350 Indirect Materials 300 Indirect Wages 750 Overhead Analysis Production Production Service Method of Dept A Dept B Dept Apportionment Light and Heat f f f f Depreciation of Machinery f f f f Rent and Rates f f f f Repairs to Equipment f f f f Indirect Materials f f f f Indirect Wages f f f f Departmental Total f f f Service Department f f f Total Overheads f f APQ01T1.XLS 2

13 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 1 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Light and Heat (Dept A) B27... Depreciation of Machinery (Dept B) C28... Rent and Rates (Service Dept) D29... Repairs to Equipment (Dept A) B30... Indirect Materials (Dept B) C31... Indirect Wages (Service Dept) D32... Departmental Total (Dept A) B33... Service Dept (Dept B) C34... Service Dept (Method of Apportionment) E34... Total Overheads (Dept A) B35... Cost Elements/Systems: Overhead Apportionment 3

14 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 1 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Service Dept (Dept A) B35... Service Dept (Dept B) C35... Service Dept (Method of Apportionment) E35... Cost Elements/Systems: Overhead Apportionment 4

15 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Blackburn plc has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 2 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Overhead costs of the Service Department have to be apportioned to the Production Departments on the basis of number of employees. INSTRUCTIONS 1 Load spreadsheet APQ02T1 into your computer and enter your name in cell E1. 2 Using the data above, complete the spreadsheet by entering the appropriate formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ02T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 2 - Task 1) by writing down the appropriate formulae from your spreadsheet. Blackburn plc is interested to know how the departmental overheads would be affected if the following changes occurred. EXERCISE 2 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) (c) The business decides to introduce more machines, changing the value of fixed assets to: Machine Shop - 90,000 Assembly - 30,000 Service Department - 30,000 As a result, the depreciation overhead is increased to 2,000 and repairs to plant changes to 625 With new equipment the number of employees is changed to: Machine Shop Assembly Service Department - 50 As a result, the figure for supervision is increased to 210 The basis of reapportionment from the Service Department to the production departments should be changed to the value of fixed assets rather than the number of employees. INSTRUCTIONS 1 Load the amended spreadsheet APQ02T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ02T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 2 - Task 2) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 5

16 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Q2 TASK A B C D E BLACKBURN plc Student Name (a) Basis of Apportionment Apportionment Data Machine Assembly Service TOTAL Shop Department Department Floor Area (sq ft) 40,000 30,000 10,000 80,000 Number of Employees ,000 Value of Fixed Assets 30,000 10,000 20,000 60,000 (b) Apportionment Overhead Rent 320 Repairs to Plant 600 Depreciation of Plant 468 Light and Power 320 Supervision 200 Plant Insurance 720 Overhead Analysis Machine Assembly Service Method of Shop Department Department Apportionment Rent f f f f Repairs to Plant f f f f Depreciation of Plant f f f f Light and Power f f f f Supervision f f f f Plant Insurance f f f f Departmental Total f f f Service Department f f f Total Overheads f f APQ02T1.XLS 6

17 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 2 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Rent (Machine Shop) B28... Repairs to Plant (Assembly Dept) C29... Depreciation of Plant (Service Dept) D30... Light and Power (Machine Shop) B31... Supervision (Assembly Dept) C32... Plant Insurance (Service Dept) D33... Departmental Total (Machine Shop) B34... Service Dept (Assembly Dept) C35... Service Dept (Method of Apportionment) E35... Total Overheads (Machine Shop) B36... Cost Elements/Systems: Overhead Apportionment 7

18 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 2 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Service Dept (Machine Shop) B35... Service Dept (Assembly Dept) C35... Service Dept (Method of Apportionment) E35... Cost Elements/Systems: Overhead Apportionment 8

19 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Cameron Ltd has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 3 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Overhead costs of the Service Department have to be apportioned to the Production Departments on the basis of number of employees. INSTRUCTIONS 1 Load spreadsheet APQ03T1 into your computer and enter your name in cell E1. 2 Using the data above, complete the spreadsheet by entering the appropriate formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ03T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 3 - Task 1) by writing down the appropriate formulae from your spreadsheet. Cameron Ltd is interested to know how the departmental overheads would be affected if the following changes occurred. EXERCISE 3 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) (c) The floor areas are to change to: Spinning Department - 8,000 sq ft Weaving Department - 16,000 sq ft Service Department - 8,000 sq ft Some of the overheads have been miscalculated and are changed to: Rent and Rates - 1,000 Light and Heat Supervision The basis of reapportionment from the Service Department to the production departments should be changed to the value of floor area rather than the number of employees. INSTRUCTIONS 1 Load the amended spreadsheet APQ03T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ03T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 3 - Task 2) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 9

20 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Q3 TASK A B C D E CAMERON LTD Student Name (a) Basis of Apportionment Apportionment Data Spinning Weaving Service TOTAL Department Department Department Floor Area (sq ft) 10,000 20,000 5,000 35,000 Number of Employees Value of Fixed Assets 30,000 10,000 10,000 50,000 (b) Apportionment Overhead Rent and Rates 420 Indirect Materials 1,200 Depreciation of Equipment 250 Light and Heat 105 Supervision 480 Administration 120 Overhead Analysis Spinning Weaving Service Method of Department Department Department Apportionment Rent and Rates f f f f Indirect Materials f f f f Depreciation of Equipment f f f f Light and Heat f f f f Supervision f f f f Administration f f f f Departmental Total f f f Service Department f f f Total Overheads f f APQ03T1.XLS 10

21 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 3 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Rent and Rates (Spinning Dept) B28... Indirect Materials (Weaving Dept) C29... Depreciation of Equipment (Service Dept) D30... Light and Heat (Spinning Dept) B31... Supervision (Weaving Dept) C32... Administration (Service Dept) D33... Departmental Total (Spinning Dept) B34... Service Dept (Weaving Dept) C35... Service Dept (Method of Apportionment) E35... Total Overheads (Spinning Dept) B36... Cost Elements/Systems: Overhead Apportionment 11

22 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 3 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Service Dept (Spinning Dept) B35... Service Dept (Weaving Dept) C35... Service Dept (Method of Apportionment) E35... Cost Elements/Systems: Overhead Apportionment 12

23 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Ferguson Foods Ltd has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 4 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Depreciation is to be allocated as shown: Production Department A 300 Production Department B 410 Service Department - Canteen 110 Service Department - Office 480 (c) (d) (e) Overhead costs of the Service Departments have to be apportioned to the Production Departments on the basis of: Office: Number of employees Canteen: Value of fixed assets The costs associated with 2 jobs carried out during the month were as follows: Job X Job Y Direct Materials Direct Labour Hours Overheads - Dept A 1 labour hr 1 labour hr Overheads - Dept B 2 mach hrs 1 mach hr The profit mark-up on Job X is 10% on total cost and on Job Y 15% on total cost. INSTRUCTIONS 1 Load spreadsheet APQ04T1 into your computer and enter your name in cell E1. 2 Using the data above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ04T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 4 - Task 1) by writing down the appropriate formulae from your spreadsheet. Cost Elements: Overhead Apportionment 13

24 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Ferguson Foods Ltd wants to be sure that its system of allocating and apportioning overheads results in the lowest possible prices to customers. With this in mind the Management Accountant has decided to make the following changes to the present system. EXERCISE 4 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) Depreciation is to be allocated as Department A 1,546; Department B 753; Canteen 1,500 and Office 201. (b) Rent and Rates are 500 and Power 759. (c) Labour hours are changed to Department A 150 and Department B 50. (d) Machine hours are changed to Department A 500 and Department B 100. INSTRUCTIONS 1 Load the amended spreadsheet APQ04T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ04T2S. 4 Print your completed spreadsheet. Cost Elements: Overhead Apportionment 14

25 Accounting and Finance: Management Accounting - Overhead Apportioment - Int 2/Higher Q4 TASK A B C D E F FERGUSON FOODS LTD Student Name (a) Basis of Apportionment Apportionment Data Production Production Service Dept Service TOTAL Dept A Dept B Canteen Office Floor Area 30% 50% 10% 10% 100% Number of Employees Value of Fixed Assets 12,000 18,000 10,000 6,000 46,000 Machine Hours per Department Labour Hours per Department (b) Apportionment Overhead Allocated Depreciation 1,300 Productive Wages 14,200 Rent and Rates 300 Light and Heat 500 Power 920 Overhead Analysis Production Production Service Dept Service Method of Dept A Dept B Canteen Office Apportionment Allocated Depreciation d d d d f Productive Wages f f f f f Rent and Rates f f f f f Light and Heat f f f f f Power f f f f f Departmental Total f f f f Service Department - Office f f f f Departmental Total f f f Service Department - Canteen f f f Total Overheads f f Overhead Asorption Production Production Dept A Dept B Machine Rate per Hour f f Labour Rate per Hour f f Job Costing Job X Job Y Materials d d Labour f f Overheads - Department A f f Overheads - Department B f f Total Cost f f Add: Profit f f Selling Price f f APQ04T1.XLS 15

26 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 4 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Allocated Depreciation (Method of Apportionment) F28... Productive Wages (Dept A) B29... Rent and Rates (Dept B) C30... Light and Heat (Canteen) D31... Power (Office) E32... Departmental Total (Dept A) B33... Machine Rate per Hour (Dept B) C43... Labour (Job X) B50... Overheads - Dept A (Job Y) C51... Overheads - Dept B (Job X) B52... Total Cost (Job Y) C53... Profit (Job X) B54... Selling Price (Job Y) C55... Cost Elements/Systems: Overhead Apportionment 16

27 Accounting and Finance: Management Accounting - Overhead Apportionment -Int 2/Higher Greenend plc has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 5 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Rates are to be allocated as shown: Production Department - Binding 650 Production Department - Packing 850 Service Department - Warehouse 430 Service Department - Office 100 (c) (d) (e) Overhead costs of the Service Departments have to be apportioned to the Production Departments on the basis of: Office: Value of fixed assets Warehouse: Number of employees The costs associated with 2 jobs carried out during the month were as follows: Job Smith Job Brown Direct Materials Direct Labour Hours Overheads - Binding 1 labour hr 2 labour hrs Overheads - Packing 1 mach hr 1 mach hr The profit mark-up on each job is 10% on total cost. INSTRUCTIONS 1 Load spreadsheet APQ05T1 into your computer and enter your name in cell E1. 2 Using the data above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ05T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 5 - Task 1) by writing down the appropriate formulae from your spreadsheet. Cost Elements./Systems: Overhead Apportionment 17

28 Accounting and Finance: Management Accounting - Overhead Apportionment -Int 2/Higher Greenend plc wants to be sure that its system of allocating and apportioning overheads results in the lowest possible prices to customers. With this in mind the Management Accountant has decided to make the following changes to the present system. EXERCISE 5 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) Rates to be allocated as Binding 1,013; Packing 924; Warehouse 521 and Office 200. (b) Light and Heat is 800 and Factory Insurance 1,000. (c) Machine hours are changed to Binding 300 and Packing 400. (d) The cost of materials for Job Smith is and the direct labour for Job Brown is INSTRUCTIONS 1 Load the amended spreadsheet APQ05T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ05T2S. 4 Print your completed spreadsheet. Cost Elements./Systems: Overhead Apportionment 18

29 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Q5 TASK GREENEND plc (a) Basis of Apportionment A B C D E F Student Name Apportionment Data Production Production Service Dept Service TOTAL Binding Packing Warehouse Office Floor Area 40% 50% 5% 5% 100% Number of Employees Value of Fixed Assets 15,000 25,000 10,000 5,000 55,000 Machine Hours per Department Labour Hours per Department (b) Apportionment Overhead Allocated Rates 2,030 Productive Wages 13,000 Repairs to Equipment 330 Light and Heat 500 Factory Insurance 900 Overhead Analysis Production Production Service Dept Service Method of Binding Packing Warehouse Office Apportionment Allocated Rates d d d d f Productive Wages f f f f f Repairs to Equipment f f f f f Light and Heat f f f f f Factory Insurance f f f f f Departmental Total f f f f Service Department - Office f f f f Departmental Total f f f Service Department - Warehouse f f f Total Overheads f f Overhead Asorption Production Production Binding Packing Machine Rate per Hour f f Labour Rate per Hour f f Job Costing Job Smith Job Brown Materials d d Labour f f Overheads - Binding f f Overheads - Packing f f Total Cost f f Add: Profit f f Selling Price f f APQ05T1.XLS 19

30 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 5 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Allocated Rates (Method of Apportionment) F28... Productive Wages (Binding Dept) B29... Repairs to Equipment (Packing Dept) C30... Light and Heat (Warehouse) D31... Factory Insurance (Office) E32... Departmental Total (Binding Dept) B33... Machine Rate per Hour (Packing Dept) C43... Labour (Job Smith) B50... Overheads - Binding (Job Brown) C51... Overheads - Packing (Job Smith) B52... Total Cost (Job Brown) C53... Profit (Job Smith) B54... Selling Price (Job Brown) C55... Cost Elements/Systems: Overhead Apportionment 20

31 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Hardcourt Brothers has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 6 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Wages are to be allocated as shown: Production Department - Turning 5,240 Production Department - Assembly 6,160 Service Department - Warehouse 1,976 Service Department - Office 6,756 (c) (d) Overhead costs of the Service Departments have to be apportioned to the Production Departments on the basis of: Office: Floor area Warehouse: Number of employees The costs associated with 2 jobs carried out during the month were as follows: Job 55 Job 70 Direct Materials Direct Labour Hours Overheads - Turning 1 labour hr 3 labour hrs 1 mach hr 3 mach hrs Overheads - Assembly 2 labour hrs 1 labour hr 1 mach hr 2 mach hrs (e) The profit mark-up on Job 55 is 20% on total cost and the mark-up on Job 70 is 10% on total cost. INSTRUCTIONS 1 Load spreadsheet APQ06T1 into your computer and enter your name in cell E1. 2 Using the data above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ06T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 6 - Task 1) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 21

32 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Hardcourt Brothers wants to be sure that its system of allocating and apportioning overheads results in the lowest possible prices to customers. With this in mind the Management Accountant has decided to make the following changes to the present system. EXERCISE 6 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) The overhead charge from Assembly to Job 55 is 3 labour hours and 2 machine hours. Overhead costs of the Warehouse have to be apportioned to the Production Departments on the basis of floor area. INSTRUCTIONS 1 Load the amended spreadsheet APQ06T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ06T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 6 - Task 2) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 22

33 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Q6 TASK A B C D E F HARDCOURT Bros Student Name (a) Basis of Apportionment Apportionment Data Production Production Service Dept Service TOTAL Turning Assembly Warehouse Office Floor Area 60% 20% 10% 10% 100% Number of Employees Value of Fixed Assets 50,000 10,000 6,000 4,000 70,000 Machine Hours per Department Labour Hours per Department (b) Apportionment Overhead Allocated Wages 20,132 Power 35,000 Repairs to Equipment 1,400 Light and Heat 1,000 Rent and Rates 1,000 Overhead Analysis Production Production Service Dept Service Method of Turning Assembly Warehouse Office Apportionment Allocated Wages d d d d f Power f f f f f Repairs to Equipment f f f f f Light and Heat f f f f f Rent and Rates f f f f f Departmental Total f f f f Service Department - Office f f f f Departmental Total f f f Service Department - Warehouse f f f Total Overheads f f Overhead Asorption Production Production Turning Assembly Machine Rate per Hour f f Labour Rate per Hour f f Job Costing Job 55 Job 70 Materials d d Labour f f Overheads - Turning f f Overheads - Assembly f f Total Cost f f Add: Profit f f Selling Price f f APQ06T1.XLS 23

34 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 6 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Allocated Wages (Method of Apportionment) F28... Power (Turning Dept) B29... Repairs to Equipment (Assembly Dept) C30... Light and Heat (Warehouse) D31... Rent and Rates (Office) E32... Departmental Total (Turning Dept) B33... Machine Rate per Hour (Assembly Dept) C43... Labour (Job 55) B50... Overheads - Assembly (Job 70) C51... Overheads - Turning (Job 55) B52... Total Cost (Job 70) C53... Profit (Job 55) B54... Selling Price (Job 70) C55... Cost Elements/Systems: Overhead Apportionment 24

35 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Formulae Worksheet (Question 6 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Service Dept - Warehouse (Turning Dept) B36... Service Dept - Warehouse (Assembly Dept) C36... Overheads - Assembly (Job 55) B52... Cost Elements/Systems: Overhead Apportionment 25

36 Accounting and Finance: Management Accounting - Overhead Apportioning - Higher Kat-Kit plc has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 7 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) (c) (d) (e) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Expenses and Insurance are to be allocated as shown: Expenses Insurance Production Department A Production Department B Production Department C Production Department D Production Department E Service Department - Canteen Service Department - Personnel Overhead costs of the Service Departments have to be apportioned to the Production Departments on the basis of: Personnel: Number of employees Canteen: Floor area The costs associated with 5 jobs carried out during the month were as follows: Job 123 Job 245 Job 456 Job 874 Job 913 Direct Materials Direct Labour Hours Overheads - Dept A 1 labour hr 1 labour hr 2 labour hrs 2 mach hrs 1 mach hr Overheads - Dept B 2 mach hrs 1 mach hr 1 labour hr 3 labour hrs 1 mach hr Overheads - Dept C 1 labour hr 1 labour hr 1 labour hr 2 labour hrs 3 mach hrs Overheads - Dept D 1 labour hr 1 labour hr 3 labour hrs 1 labour hr 4 mach hrs Overheads - Dept E 1 labour hr 1 labour hr 2 labour hrs 3 mach hrs 2 labour hrs The profit mark-up on all jobs is 10% on total cost. INSTRUCTIONS 1 Load spreadsheet APQ07T1 into your computer and enter your name in cell H1. 2 Using the data above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ07T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 7 - Task 1) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 26

37 Accounting and Finance: Management Accounting - Overhead Apportioning - Higher Kat-Kit plc wants to be sure that its system of allocating and apportioning overheads results in the lowest possible prices to customers. With this in mind the Management Accountant has decided to make the following changes to the present system. EXERCISE 7 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) Expenses are to be allocated as Department A 50; Department B 100; Department C 80; Department D 90; Department E 20; Canteen 72 and Personnel 88. (b) Rent and Rates are 5,600 and Indirect Wages 800. (c) Labour hours are changed to Department A 900; Department C 200 and Department E 140. (d) Machine hours are changed to Department A 500; Department C 600 and Department E 650. (e) Light and Heat is to be apportioned on the basis of number of employees and Personnel Department overheads are to be apportioned according to Floor Area. (f) Employee numbers have been altered to Department A 20; Department B 40; Department C 25; Department D 50; Department E 15; Canteen 40 and Personnel 10. (g) The following changes have been made to the 5 jobs: Job 132: Job 245: Job 456: Job 874: Job 913: Direct materials are 16.70; Overhead charge to Department A is 2 labour hours; Overhead charge to Department E is 2 labour hours Direct labour is 10 hours at 5.50; Overhead charge to Department B is 2 machine hours; Overhead charge to Department C is 2 labour hours Overhead charge to Department B is 2 labour hours; Overhead charge to Department E is 3 labour hours Direct materials are 16.00; Overhead charge to Department B is 1 machine hour; Overhead charge to Department E is 1 machine hour Direct labour is 3 hours at 4.00; Overhead charge to Department C is 1 machine hour; Overhead charge to Department D is 1 machine hour INSTRUCTIONS 1 Load the amended spreadsheet APQ07T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ07T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 7 - Task 2) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 27

38 Accounting and Finance: Management Accounting - Overhead Apportionment - Int 2/Higher Q7 TASK KAT-KIT plc (a) Basis of Apportionment A B C D E F G H I Student Name Apportionment Data Production Service TOTAL Dept A Dept B Dept C Dept D Dept E Canteen Personnel Floor Area 20% 15% 25% 5% 10% 15% 10% 100% Number of Employees Value of Fixed Assets 40,000 20,000 10,000 10,000 5,000 10,000 5, ,000 Labour Hours per Department Machine Hours per Department (b) Apportionment Overhead Allocated Expenses 321 Allocated Insurance 312 Light and Heat 2,000 Depreciation of Machinery 3,000 Rent and Rates 4,800 Repairs to Equipment 600 Indirect Wages 320 Overhead Analysis Production Service Method of Dept A Dept B Dept C Dept D Dept E Canteen Personnel Apportionment Allocated Expenses d d d d d d d f Allocated Insurance d d d d d d d f Light and Heat f f f f f f f f Depreciation of Machinery f f f f f f f f Rent and Rates f f f f f f f f Repairs to Equipment f f f f f f f f Indirect Wages f f f f f f f f Departmental Total f f f f f f f Service Department - Personnel f f f f f f f Departmental Total f f f f f f Service Department - Canteen f f f f f f Total Overheads f f f f f Overhead Asorption Production Dept A Dept B Dept C Dept D Dept E Labour Rate per Hour f f f f f Machine Rate per Hour f f f f f Job Costing Job 132 Job 245 Job 456 Job 874 Job 913 Materials d d d d d Labour f f f f f Overheads - Dept A f f f f f Overheads - Dept B f f f f f Overheads - Dept C f f f f f Overheads - Dept D f f f f f Overheads - Dept E f f f f f Total Cost f f f f f Add: Profit f f f f f Selling Price f f f f f APQ07T1.XLS 28

39 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Formulae Worksheet (Question 7 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Allocated Expenses (Method of Apportionment) I30... Light and Heat (Dept A) B32... Depreciation of Machinery (Dept B) C33... Departmental Total (Dept C) D37... Service Department - Personnel (Dept D) E38... Service Department - Canteen (Dept E) F40... Machine Rate per Hour (Dept C) D48... Labour (Job 245) C54... Overheads - Dept D (Job 456) D58... Overheads - Dept E (Job 245) C59... Total Cost (Job 456) D60... Profit (Job 874) E61... Selling Price (Job 913) F62... Cost Elements/Systems: Overhead Apportionment 29

40 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Formulae Worksheet (Question 7 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Light and Heat (Dept A) B32... Light and Heat (Method of Apportionment) I32... Service Department - Personnel (Dept C) D38... Labour (Job 245) C54... Overheads - Dept A (Job 132) B55... Overheads - Dept E (Job 456) D59... Cost Elements/Systems: Overhead Apportionment 30

41 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Lawson Laundries has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 8 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) (c) (d) (e) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Expenses and Power are to be allocated as shown: Expenses Power Production Department ,000 Production Department ,000 Production Department ,000 Production Department ,000 Production Department ,000 Service Department - Office Service Department - Warehouse Overhead costs of the Service Departments have to be apportioned to the Production Departments on the basis of: Warehouse: Number of employees Office: Floor area The costs associated with 5 jobs carried out during the month were as follows: Job 1 Job 2 Job 3 Job 4 Job 5 Direct Materials Direct Labour Hours Overheads - Dept 1 1 labour hr 1 labour hr 2 mach hrs 1 mach hr 2 labour hrs Overheads - Dept 2 2 mach hrs 1 mach hr 2 labour hrs 1 labour hr 3 mach hrs Overheads - Dept 3 1 labour hr 1 labour hr 2 mach hrs 1 labour hr 2 labour hrs Overheads - Dept 4 1 labour hr 1 labour hr 1 mach hr 2 labour hrs 1 mach hr Overheads - Dept 5 1 labour hr 1 labour hr 1 mach hr 1 mach hr 2 labour hrs The profit mark-up on all jobs is 12% on total cost. INSTRUCTIONS 1 Load spreadsheet APQ08T1 into your computer and enter your name in cell H1. 2 Using the data above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ08T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 8 - Task 1) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 31

42 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Lawson Laundries wants to be sure that its system of allocating and apportioning overheads results in the lowest possible prices to customers. With this in mind the Management Accountant has decided to make the following changes to the present system. EXERCISE 8 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) Power is to be allocated as Department 1 2,500; Department 2 2,500; Department 3 1,000; Department 4 2,000; Department 5 3,000; Office 1,258 and Warehouse 1,930. (b) Light and Heat is to be 3,000 and Factory Insurance 7,000. (c) (d) (e) Labour hours are changed to Department 1 500; Department 2 100; Department 3 250; Department and Department Machine hours are changed to Department 1 150; Department and Department 3 200; Department and Department Factory Insurance is to be apportioned on the basis of value of fixed assets and Office overheads are to be apportioned according to number of employees. (f) Floor areas have been altered to Department 1 15%; Department 2 10%; Department 3 20%; Department 4 20%; Department 5 15%; Office 10% and Warehouse 10%. (g) The following changes have been made to the 5 jobs: Job 1: Job 2: Job 3: Job 4: Job 5: Direct materials are 14.80; Overhead charge to Department 3 is 2 labour hours; Overhead charge to Department 4 is 2 labour hours Direct labour is 10 hours at 4.50; Overhead charge to Department 1 is 1 machine hour; Overhead charge to Department 4 is 2 labour hours Overhead charge to Department 3 is 1 labour hour; Overhead charge to Department 5 is 1 labour hour Direct materials are 33.50; Overhead charge to Department 1 is 2 machine hours; Overhead charge to Department 2 is 1 machine hour Direct labour is 4 hours at 4.80; Overhead charge to Department 2 is 1 machine hour; Overhead charge to Department 4 is 2 machine hours INSTRUCTIONS 1 Load the amended spreadsheet APQ08T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ08T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 8 - Task 2) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 32

43 Accounting and Finance - Management Accounting - Overhead Apportionment - Higher Q8 TASK A B C D E F G H I LAWSON LAUNDRIES Student Name (a) Basis of Apportionment Apportionment Data Production Service TOTAL Dept 1 Dept 2 Dept 3 Dept 4 Dept 5 Office Warehouse Floor Area 20% 20% 10% 10% 20% 10% 10% 100% Number of Employees Value of Fixed Assets 3,000 10,000 26,000 9,000 12,000 5,000 5,000 70,000 Labour Hours per Department Machine Hours per Department (b) Apportionment Overhead Allocated Expenses 640 Allocated Power 10,860 Light and Heat 2,000 Depreciation of Machinery 14,000 Factory Insurance 4,800 Repairs to Equipment 700 Salaries 42,000 Overhead Analysis Production Service Method of Dept 1 Dept 2 Dept 3 Dept 4 Dept 5 Office Warehouse Apportionment Allocated Expenses d d d d d d d f Allocated Power d d d d d d d f Light and Heat f f f f f f f f Depreciation of Machinery f f f f f f f f Factory Insurance f f f f f f f f Repairs to Equipment f f f f f f f f Salaries f f f f f f f f Departmental Total f f f f f f f Service Department - Warehouse f f f f f f f Departmental Total f f f f f f Service Department - Office f f f f f f Total Overheads f f f f f Overhead Asorption Production Dept 1 Dept 2 Dept 3 Dept 4 Dept 5 Labour Rate per Hour f f f f f Machine Rate per Hour f f f f f Job Costing Job 1 Job 2 Job 3 Job 4 Job 5 Materials d d d d d Labour f f f f f Overheads - Dept 1 f f f f f Overheads - Dept 2 f f f f f Overheads - Dept 3 f f f f f Overheads - Dept 4 f f f f f Overheads - Dept 5 f f f f f Total Cost f f f f f Add: Profit f f f f f Selling Price f f f f f APQ08T1.XLS 33

44 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Formulae Worksheet (Question 8 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Allocated Power (Method of Apportionment) I31... Light and Heat (Dept 1) B32... Depreciation of Machinery (Dept 2) C33... Factory Insurance (Dept 3) D34... Repairs to Equipment (Dept 4) E35... Salaries (Dept 5) F36... Departmental Total (Dept 1) B37... Service Department - Warehouse (Dept 2) C38... Service Department - Office (Dept 3) D40... Labour Rate per Hour (Dept 4) E47... Machine Rate per Hour (Dept 5) F48... Overheads - Dept 1 (Job 1) B56... Add: Profit (Job 2) C61... Cost Elements/Systems: Overhead Apportionment 34

45 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Formulae Worksheet (Question 8 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Factory Insurance (Dept 1) B34... Service Department - Office (Dept 2) C40... Labour (Job 5) F54... Overheads - Dept 3 (Job 1) B57... Overheads - Dept 4 (Job 5) F58... Overheads - Dept 5 (Job 3) D59... Cost Elements/Systems: Overhead Apportionment 35

46 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Manor Textiles has decided to use a spreadsheet to perform 2 tasks. Task 1 is to use an existing spreadsheet as a basis of apportioning overhead costs to Production and Service Departments. Task 2 is to amend the spreadsheet formulae/data in response to a range of "what if" situations. EXERCISE 9 - TASK 1 Read carefully the data below and then carry out the instructions which follow. DATA (a) (b) (c) (d) (e) Overhead costs have to be apportioned to the Production Departments using an appropriate basis. Materials and Insurance are to be allocated as shown: Materials Insurance Spinning Weaving Binding Assembly Packing Service Department - Office Service Department - Canteen Overhead costs of the Service Departments have to be apportioned to the Production Departments on the basis of: Canteen: Floor area Office: Value of fixed assets The costs associated with 5 jobs carried out during the month were as follows: Job Dundee Job Clyde Job Perth Job Ayr Job Inverness Direct Materials Direct Labour Hours Overheads - Spinning 2 labour hrs 1 labour hr 1 mach hr 2 mach hrs 1 mach hr Overheads - Weaving 1 mach hr 2 mach hrs 1 labour hr 2 labour hrs 3 labour hrs Overheads - Binding 2 labour hrs 1 labour hr 4 mach hrs 1 mach hr 1 labour hr Overheads - Assembly 3 labour hrs 2 labour hrs 2 mach hrs 1 mach hr 1 labour hr Overheads - Packing 1 labour hr 1 labour hr 1 mach hr 4 labour hrs 1 mach hr The profit mark-up on all jobs is 8% on total cost. INSTRUCTIONS 1 Load spreadsheet APQ09T1 into your computer and enter your name in cell H1.. 2 Using the data above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as APQ09T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 9 - Task 1) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 36

47 Accounting and Finance: Management Accounting - Overhead Apportionment - Higher Manor Textiles wants to be sure that its system of allocating and apportioning overheads results in the lowest possible prices to customers. With this in mind the Management Accountant has decided to make the following changes to the present system. EXERCISE 9 - TASK 2 Read carefully the data below and then carry out the instructions which follow. DATA (a) Materials to be allocated as Spinning 100; Weaving 120; Binding 100; Assembly 80; Packing 120; Office 84 and Canteen 118. Insurance allocated to the Canteen should be 107. (b) The floor area measurements should read Spinning 300 sq m; Weaving 400 sq m; Binding 200 sqm; Assembly 150 sq m; Packing 150 sq m; Office 150 sq m and Canteen 150 sq m. (c) Labour hours are changed to Spinning 70; Weaving 50 and Packing 50. (d) Machine hours are changed to Spinning 200; Weaving 300; Binding 250; Assembly 250 and Packing 300. (e) Power is 4,000 and Repairs to Equipment 560. (f) (g) Both the Office and Canteen overheads are to be apportioned according to number of employees. The following changes have been made to the 5 jobs: Job Dundee: Job Clyde: Job Perth: Job Ayr: Direct materials are 17.80; Overhead charge to Weaving is 1 labour hour; Overhead charge to Packing is 2 labour hours Direct labour is 2 hours at 6.50; Overhead charge to Spinning is 1 machine hour; Overhead charge to Binding is 2 labour hours Overhead charge to Weaving is 2 labour hours; Overhead charge to Packing is 1 labour hour Direct materials are 18.50; Overhead charge to Assembly is 2 machine hours; Overhead charge to Packing is 1 labour hour Job Inverness: Direct labour is 6 hours at 9.80; Overhead charge to Weaving is 1 labour hour; Overhead charge to Packing is 2 machine hours INSTRUCTIONS 1 Load the amended spreadsheet APQ09T1S into your computer. 2 Using the data above, complete the spreadsheet by entering the appropriate data and formulae. 3 Save your amended spreadsheet as APQ09T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 9 - Task 2) by writing down the appropriate formulae from your spreadsheet. Cost Elements/Systems: Overhead Apportionment 37