Cost Accounting Level -1
Sep - Jan 2014 Semester.
Cost Accounting Level -1
I Weighting 40 %
STUDENT MCUC NUMBER:
Please note that a grade will only be given to those whose student number is noted on this form. Please ensure that the student numbers from all group members are recorded accurately. 2012868
3rd Dec 2013.
Umar Farooq Awan
The work contained in this assignment is my own and that all materials and sources used have been acknowledged. I/We have not copied or colluded in part or in whole, or otherwise plagiarised the work of other students. This assignment has not been submitted for previous assessment in any other subject or to a substantial extent has been accepted for the award of any other unit, module, degree or diploma of a university or any other institute, except where due acknowledgement is made in the text. I/We confirm that I/we have read, understood and followed the guidelines for assignment submission and presentation provided by the lecturer. I/We understand that this assignment may be retained on the database and used to make comparisons with other assignments in future. I/We have made a copy of my assignment
This work may be photocopied and/or communicated for the purpose of identifying plagiarism. I/We give permission for a copy of this marked assignment to be retained by the faculty of Business Management for the purpose of course reviews by external examiners and to be used as a resource by Majan College. I/We understand that unauthorized late submission without a valid written extension will be marked as per the college policy mentioned in the students handbook page 18 section 18.5. WORDS-1577/2227 CONTENTS
Introduction, Difference Between Allocation, Apportionment & Re-Apportionment 3
Significance Of Factory Overhead Allocation And Apportionment 4
Methods For Re- Apportionment
Current & Suggested Method
Importance Of IT, Limitation Of Apportionment, Conclusion
In recent years, Factories have become more automatic; which has led to an increase in manufacturing cost significantly and has a huge impact on as factory overhead as it comprises a percentage of total manufacturing cost. Factory overheads expenses include costs that may be classified as semi-variable, fixed and variable. According to Vanderbeck (2002), all costs incurred by the factory are charged indirectly to the manufactured goods are known as FACTORY OVERHEAD. In addition Vanderbeck (2013), also states that factory overhead takes account of all costs which have direct impact on the production of manufactured goods excluding its direct material and direct labor. This report will examine Shamu LLC a major Omani furniture manufacturer producing various items for both homes and offices. The company has no accounting section and the allocation of costs of the 2 service departments amongst the 3 production departments is carried out by the company's finance section on the basis of total number of hours worked in each production department. The objective of the report to define a proper system for fixed overhead allocation and apportionment for Shamu LLC and design a new allocation system which is effective and can yield the cost and selling price of products at different stages of completion.
DIFFERENCE BETWEEN ALLOCATION, APPORTIONMENT& RE-APPORTIONMENT
ALLOCATION: It is the allocation of whole items of cost centers, whether they may be production cost centers or service cost centers. For instance, Hospitals make use of difficult method for allocating costs of service departments such as...
References: SIGNIFICANCE OF FACTORY OVERHEAD ALLOCATION AND APPORTIONMENT
Collin (2012), states that at the present time businesses are very dynamic
LIMITATIONS OF APPORTIONMENT AND WAYS TO REDUCE IT
Hansen, Mowen and Guan (2009), points out that fact that most companies are faced with task of allocating costs among very large number of cost centers
Drury, C., 2011, Cost and Management Accounting, 7th Ed. USA: South-Western CENGAGE Learning.
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Hansen, D., Mowen, M., Guan, L., 2009, Cost Management. USA: South-Western CENGAGE Learning.
Horngren, C., Datar, S., Foster, G., 2006, Managerial Emphasis. USA: Prentice Hall.
Khan, Y., Jain, P., 2000, Cost Accounting. USA: Tata McGraw Hill Limited.
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Rajasekaran, V., Lalitha, R., 2010, Cost Accounting. USA: Dorling Kindersley.
Vanderbeck, E., 2013, Cost Accounting, 16th Ed.USA: South-Western CENGAGE Learning.
Vanderbeck, E., 2002, Principles of Cost Accounting, 12th Ed. USA: South-Western CENGAGE Learning.
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