Q2) the following infomation on indirect overhead costs relates to “Sunset Foods” for the
Q2) the following infomation on indirect overhead costs relates to “Sunset Foods” for the year ended December 31 2016. Overhead Rent 180,000 60,000 25,000 Property Insurance Equipment Insurance Energy Costs Training Costs 45,000 40,000 75,000 160,000 Equipment Depreciation Employee Benefits The following data is also available to assist in the apportionment of overheads Administration Production 10,000 Total Basis Floor Area Research 30,000 80 8,000 12,000 Employees Purchases 40 30 10 100,000 40,000 350 150,000 €150,000 250 €250,000 €250,000 Equipment NBV Availability (days) €60,000 You are required to Apportion the above overheads to cach of the centres Re-apportion the administration department overheads to the other two departments on a 80/20 basis (80% to production, 20 % to research) Calculate the daily overhead absorption rate for production and research departments Briefly discuss why it is important to be aware of the impact of over and under absorption of indirect overheads on a business. 30 marks 03) Woodstock Ltd delivered weekend culinary tuition courses during July 2017. Each course, including bed breakfast and dinner was priced at E100. The following figures relate to July 2017 Number of Attendees. Unit Variable Costs 200 €15 Food Tuition 10 Other Variable Overhead Fixed Costs E5 E3,000 Forecast data for August suggests that food costs are expected to increase by 10 % , tuition costs by 10%, other variable overheads by 20% and fixed costs by 5%. Management are presently deciding on pricing policy for the coming year. You are required to; Calculate the profit for July 2017 Calculate the selling price of a weckend course in August if numbers sold and profit earned are to remain the same as those for July Estimate the number of courses that Woodstock Ltd needs to sell in August to maintain July's profit, if the selling price needs to decrease by 20 % 30 marks Q4) the following information on indirect overhead costs relates to “Ned and Nancy's Nourishing Foods” for the year ended December 31 2017. Overhead 180,000 60,000 25,000 45,000 Rent Property Insurance Equipment Insurance Energy Costs Training Costs Equipment Depreciation Employee Benefits 40,000 75,000 160,000 The following data is also available to assist in the apportionment of overheads Criterion Administration Production Research Total Floor Area 10,000 12,000 8,000 30,000 Employees Purchases 40 30 10 80 €100,000 €150,000 250,000 Equipment NBV Availability (days) E60,000 E40,000 E150,000 €250,000 350 250 You are required to Apportion the above overheads to each of the centres (20 marks) Re-apportion the administration department overheads to the other two on a 80/20 basis (80 % departments (5 marks) to production, 20% to rescarch) Calculate the daily overhead absorption rate for production and research departments (5 marks) (30 marks) We were unable to transcribe this image
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