Overhead Analysis + Job Costing Flashcards
What is the Basis for “Depreciation” ?
Cost of Plant
What is the Basis for “Factory Administration” ?
Number of Employees
What is the Basis for “Power” ?
Power (Kw Hrs)
What is the Basis for “Heat and Light” ?
Area (m^2)
What is the Basis for “Canteen Costs” ?
Number of Employees
What is the Basis for “Machine Insurance” ?
Cost of Plant
How do you know which one is the Overhead which has been Allocated ?
Either:
- Check the Overheads selection, if there is one which is usually an Expense (e.g. Indirect Materials)
Or
- Check the date available, check the ones with pound signs ( £ ) if there are > 1 then check the overheads selection
How many Production Departments and Service Departments are there usually in a question ?
3 Production
2 Service
How do you “Apportion Overheads using the most appropriate Basis”
Pick the best Basis for each (e.g. Rent = Area) add up the total data for “Area” take Department A data and divide it by the total, and multiply by the Value for Rent
How do you “Re-Apportion overheads from the service departments to the Production Departments” ?
- Take your total Value for the department which should already be calculated, subtract the service department value from the total value :
(E.g. Total = 300 department Y = 15 -> 300 - 15 = 285)
Use this as your new Total and recalculate the Overheads, multiplying by the total value of Overheads in Department Y
What are the 3 heading which should be used when using Overhead Analysis
Item
Basis
Total
How do you know why basis to use when Re-Apportioning the service Department Overheads
The question should give you a basis to use
What is the Basis for “Rent and Rates” ?
Area (m^2)
What are the 3 / 4 costs which make up a job ?
Direct Materials
Direct labour
*Direct Expenses
Overheads
How do you calculate a “Mark up of 40%” ?
Take 40% of the value and add
