SUBJECT: COST AND MANAGEMENT ACCOUNTING 1

Assignment 2

Overhead Expenditure

Absorption rate Cost Center$

A B C D

Depreciation of Production Equipment

5000005000000

=0.1 250000 150000 80000 20000

Employer”s liability Insurance

100000100

=$ 1000 per employee50000 30000 15000 5000

Energy Cost 20000070%

=2857.14 per%114285.60 57142.80 28571.6

Indirect Labour 700000 300000 250000

Rent and Building Insurance

300000200000

=$ 1.50 /m2 150000 60000 60000 30000

Personnel expenses

100000100

=$ 1000/employee50000 30000 15000 5000

88571.6

Reapportioning Cost Center D

50% to A, 30% to B, 20% to C.

44285.8 26571.48 17714.32

Total 1358571.4 596571.48 494857.12

Overheads to be allocated to Cost centre D

120000

Reapportioning Cost Center D

50% to A, 30% to B, 20% to C.

60000 36000 24000

Total 1418571.4 632571.48 518857.12