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10 marksOverheads and Manufacturing Accounts

CAPE Accounting Unit 2 · 2010 · Paper 2 · Question 1(c)

A company has two service departments (1 and 2) and two production departments (A and B), with direct overhead costs, square footage, employee counts, and designated cost allocation bases provided.

Calculate the total service department costs that should be allocated to EACH production department using the direct method.

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Other parts of this question

  1. 1(a)(i)Classify EACH of the listed costs (items 2 to 16) as either variable or fixed with respect to volume or activity level.[7.5 marks]
  2. 1(a)(ii)Classify EACH of the listed costs (items 2 to 16) as either a selling and administrative cost or a product cost.[7.5 marks]
  3. 1(b)(i)Assuming the employee is idle for 5 hours due to machine breakdowns and 4 hours due to material shortages in a 40-hour week with no overtime, allocate the…[3 marks]
  4. 1(b)(ii)Assuming the employee works 48 hours in the following week with no idle time, allocate the wages between direct labour cost and manufacturing overhead cost.[3 marks]
  5. 1(b)(iii)Explain TWO ways the company could classify the cost of fringe benefits for direct labour workers in its cost records.[4 marks]

More practice: the rest of this paper · more Overheads and Manufacturing Accounts questions · all CAPE Accounting Unit 2 past papers