Transcribed Image Text: Question 7 Turquoise Ltd produces a range of dry food in packets and wet food in cans using

Excerpt
table above, allocate, apportion and reapportion these estimated costs to calculate a total estimated cost for the year for each of the manufacturing departments (i.e. packing and canning departments). (ii) Calculate an overhead absorption rate for each of the manufacturing departments, using a macne-hour rate.

Transcribed Image Text: Question 7
Turquoise Ltd produces a range of dry food in packets and wet food in cans using different
production processes. Estimated total manufacturing costs for the next year include supervisors’
salaries of £55,000 for the packing department, £60,000 for the canning department and £32,000 for
the canteen. Other overhead costs include depreciation of £59,200, cleaning materials of £7,200 and
factory administration of £8,100.
Department data for the period is as follows:
Department data
Packing Department Canning Department Canteen
Number of products produced per year
Number of cleaning times per year
Net book value of equipment
Number of workers per department
Macne hours per year
580,000
500,000
43
84
£446,200
£658,900 £36,100
18
15
1,750
1,350
(i) Using the department data in the table above, allocate, apportion and reapportion these
estimated costs to calculate a total estimated cost for the year for each of the manufacturing
departments (i.e. packing and canning departments).
(ii) Calculate an overhead absorption rate for each of the manufacturing departments, using a
macne-hour rate.

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