STAR ENGINEERING COMPANY

Actual Overhead Distribution Sheet for April

Production Departments Service Departments
Department Matchin Fabricatio Assembl Paintin Stores Maintenanc Work Total Basis for
s Overhead g n y g e s Amount Distribution
costs office Actuals
for April

A. Allocation
of overhead E1-
to all FABRICATION
departments 33,000 22,000 11,000 7,000 44,00 32,700 0 1,49,70
A.1 Indirect 0 0
Labour and
Supervision

A.2 Indirect 12,800 E-1

materials 2,200 1,100 3,300 3,400 0 2,800 0 FABRICATION
and supplies A
A.3 Factory 45,500 38,500 30,800 22,400 15,40 7,700 7,700 1,68,00 AREA
Rent 0 0
A.4 44,000 BV
Depreciation 22,000 11,000 5,500 2,200 1,100 1,650 550
of Plant and
Machinery
A.5 Building 2,400 AREA
Rates and 650 550 440 320 220 110 1,110
Taxes
A.6 Welfare 0 19,494 2% OF LABOR
Expenses 9,450 4,840 2,420 1,240 880 654
A.7 Power 40,000 20,000 2,000 4,000 0 366 2,220 68,586 ALLOCATION
A.8 Works 130,260 ALLOCATION
office 0 0 0 0 0
Salaries and
Expenses
Production Departments Service Departments
Departments Matchin Fabricatio Assembl Paintin Stores Maintenanc Works Total Basis for
Overhead g n y g e office Amount Distribution
costs Actuals
for April
(Rs.)

A.9
Miscellaneou
s Stores 0 0 0 0 1,190 0 1,190
Expenses
A.Total (A 1 140,84 DIRECT
to A 9) 152,810 97,990 55,460 40,560 62,79 45,980 0 596 , LABOR HR
0 430
B. BW OF
Reallocation PLANT &
of Service 67,200 24,640 33,600 15,400 MACHINE
Departments 0 0 140,84
Costs to 0
Production
Departments
B.1 DIRECT &
Distribution of 24,200 12,100 6,050 2,420 1,210 45,980 INDIRECT
Maintenance MACHINE
Departments
Cost’s
B.3 DIRECT&
Distribution of INDIRECT
Stores 41,776 14,488 264 7,472 64,00 LABOR
Department’s 0
Costs
Total
Charged to 285,986 149,218 95,374 65,852
Producing
C.
Departments 596,43
(A+B) 0
D. Labour
Hours Actuals
for April 1,20,000 44,000 60,000 27,500
E. Overhead
Rate/ Per 2.38 3.39 1.59 2.39
Hour (D)
 1. Do you agree with:
a. The procedures adopted by the company for the distribution of overhead costs?

b. The choice of the base for overhead absorption, i.e. labour-hour rate?

2. Job No 879 was expected to be cleared by the Inspection Department in the first week of May.
The actual materials cost application to job No. 879 was Rs. 487.92. Labour time spent on the
job was estimated to be 50 hours. In Machining: 40 hours. In Fabrication and 20 hours each in
Assembly and Painting Departments, totaling Rs. 460.10. Calculate the total cost of this job
including overhead costs.

ANSWER:

MACHINING FABRICATION ASSEMBLY PAINTING

2.38X40=95.2 3.39X50=169.50 1.59X20=31.8 2.39X20=47.8

3. If Job No. 879 is a cost-plus-fixed fee (CPFF) contract with the Government fixed fee being Rs.
200, what would be the total charges recoverable from the client?

ANSWER: 149,700+200=149,900
4. Evaluate the cost accounting system adopted by the accountant and suggest improvements.

Need to be distributed based on same