CMA Intermediate · Cost Accounting · Overheads
Mehta Auto Ltd. has production departments A and B and service departments S1 and S2. Primary overheads: A Rs 2,00,000; B Rs 1,50,000; S1 Rs 60,000; S2 Rs 40,000. S1 is shared A:B:S2 = 50%:30%:20%; S2 is shared A:B = 50%:50%. Using the step (non-reciprocal) method, S1 is distributed first. What is the total overhead of B after secondary distribution?
B's total is Rs 1,94,000, which is not among the options.
- ARs 2,00,000
- BRs 1,88,000Correct
- CRs 1,78,000
- DRs 1,95,000
Explanation
S1 Rs 60,000 goes: A 30,000, B 18,000, S2 12,000. S2 becomes 40,000 + 12,000 = 52,000, shared equally: A 26,000, B 26,000. B total = 1,50,000 + 18,000 + 26,000 = Rs 1,94,000. Check: A = 2,00,000 + 30,000 + 26,000 = 2,56,000; sum = 4,50,000, equals total primary. So B is Rs 1,94,000.
Did you get it right without looking?
One question tells you little. A timed set on Overheads shows your real accuracy, how long you take and where you lose marks.
More Overheads questions
- Which of the following is correctly classified as an administrative overhead rather than a factory overhead?
- In a Pune factory, a department's overheads are Rs 4,80,000. Its direct wages are Rs 3,20,000 and prime cost is Rs 8,00,000. A job has prime…
- Canteen expenses of ₹72,000 are to be apportioned to three departments on the basis of the number of workers employed. Dept X has 50 workers…
- In the repeated distribution (continuous allotment) method of secondary distribution, the process of re-apportioning service department cost…
- Factory rent of ₹80,000 is apportioned on floor area and machinery depreciation of ₹1,20,000 on the book value of machinery. Data: Dept A ha…
- Kaveri Ltd. produced 8,000 units. Its factory overhead recovered at Rs 12 per unit was Rs 96,000, while actual factory overhead was Rs 1,08,…