Get premium membership and access questions with answers, video lessons as well as revision papers.
- Mjengo Ltd. Is a medium sized company which operates three production departments and two service departments. The three production departments are: Machinery department D, machinery...(Solved)
Mjengo Ltd. Is a medium sized company which operates three production departments and two service departments. The three production departments are: Machinery department D, machinery department E and Assembly department.
The two service departments are materials procurement and general support department.
Date posted: December 15, 2021. Answers (1)
- MMC Ltd. produces machine parts on a job-order basis. Majority of the business contracts are obtained through bidding. Business firms competing with MMC Ltd. bid...(Solved)
MMC Ltd. produces machine parts on a job-order basis. Majority of the business contracts are obtained through bidding. Business firms competing with MMC Ltd. bid full cost plus 20 per cent mark up. Recently, with the expectation of increase in sales, MMC Ltd. reduced its mark up from 25 per cent to 20 per cent.
The company operates two support departments and two production departments. The budgeted costs and the normal activity levels for each department are given below:
Additional information:
1. The direct costs of the maintenance department are allocated on the basis of employees while
those of power department are allocated on the basis of maintenance hours.
2. Departmental overhead rates are used to assign costs to products. Grinding department uses
machine hours and assembly department uses labour hours.
MMC Ltd. is preparing to bid for a contract, job K, that requires three machine hours per unit
produced in grinding and zero hours in assembly department. The expected prime costs per unit are Shs. 670.
Required:
a) Allocate the support service costs to the production departments using the direct allocation method
b) What will be the bid for job K if the direct allocation method is used?
c) Allocate the service costs to the production departments using the sequential allocation method
d) What will be the bid for job K if the sequential allocation method is used?
e) Briefly explain the problems encountered in setting overhead cost standards.
f) Distinguish between cost allocation and cost apportionment.
Date posted: December 15, 2021. Answers (1)
- Give the disadvantages of Activity Based Costing (ABC)(Solved)
Give the disadvantages of Activity Based Costing (ABC)
Date posted: March 4, 2019. Answers (1)
- Give the advantages of using Activity Based Costing (ABC)(Solved)
Give the advantages of using Activity Based Costing (ABC)
Date posted: March 4, 2019. Answers (1)
- What factors should be taken into consideration before setting up a cost accounting system(Solved)
What factors should be taken into consideration before setting up a cost accounting system
Date posted: March 4, 2019. Answers (1)
- What should be put into consideration in order for the system to be efficient.(Solved)
What should be put into consideration in order for the system to be efficient.
Date posted: February 26, 2019. Answers (1)
- Give the possible causes of discrepancies revealed by physical stock counts include:(Solved)
Give the possible causes of discrepancies revealed by physical stock counts include:
Date posted: February 26, 2019. Answers (1)
- Give the essential requirements of an effective stock control system.(Solved)
Give the essential requirements of an effective stock control system.
Date posted: February 26, 2019. Answers (1)
- Give the advantages of Standard Costing:(Solved)
Give the advantages of Standard Costing:
Date posted: February 26, 2019. Answers (1)
- List the arguments in favour of Marginal Costing:(Solved)
List the arguments in favour of Marginal Costing:
Date posted: February 26, 2019. Answers (1)
- What are the arguments in favour of Absorption (Full) Costing?(Solved)
What are the arguments in favour of Absorption (Full) Costing?
Date posted: February 26, 2019. Answers (1)
- Factors to consider in make -or - buy decisions(Solved)
Factors to consider in make -or - buy decisions
Date posted: February 26, 2019. Answers (1)
- What is the role of cost accounting in decision making(Solved)
What is the role of cost accounting in decision making.
Date posted: February 26, 2019. Answers (1)
- Factors influencing cost estimation method used by a manufacturing company(Solved)
Factors influencing cost estimation method used by a manufacturing company
Date posted: February 26, 2019. Answers (1)
- What are the features of process costing.(Solved)
What are the features of process costing.
Date posted: February 26, 2019. Answers (1)
- Give the functions of budgets.(Solved)
Give the functions of budgets.
Date posted: February 26, 2019. Answers (1)
- List the ways to improve cash management.(Solved)
List the ways to improve cash management.
Date posted: February 26, 2019. Answers (1)
- What are the causes of difference in cost and financial accounts(Solved)
What are the causes of difference in cost and financial accounts
Date posted: February 26, 2019. Answers (1)
- Give the problems in cost estimation.(Solved)
Give the problems in cost estimation.
Date posted: February 26, 2019. Answers (1)
- Give the Limitations of budgeting(Solved)
Give the Limitations of budgeting
Date posted: February 26, 2019. Answers (1)