This is a simple and effective notes to help you understand the concepts and principles taught in the 3rd year of MAF practical.
The summary is guaranteed to give you a good indication of what usually comes out in the tests and exams. There is an in-depth analysis of each topic studied in the 1s...
Methods
Simultaneous – Use cost driver other dept. e.g. S = 425 + 100/500 M
Already counts the thing in equation so allocate normal (won’t add up)
Step down – Check which dept. is doing the higher % in the other dept. (read horizontally)
For 2nd S.D only allocate the % of the PD e.g. 35/85 and 51/85 (not / by 100)
Allocation basis
Machine insurance – Value
Building insurance – Area, unless BV given
Depreciation – BV or Machine value or cost
Supervisor – no. of emp. Or DLH
Heat and light – Area
Power – KWH
Canteen – no. of emp.
Maintenance – MH or maintenance hrs
Cleaning – Floor area
Capital intensive means MH
Cost card
All DLH acc. To DLH rate
Overheads is tricky, check what the CD is
When CD is DLH use LH similar to DLH all. but at FOAR rate from table
,MU on cost, normal
MU on SP, (CP/ (100 – MU))
Read carefully, if its for a JOB CC or Product CC, with JCC its according to like e.g. 18units
General
Depreciation – BV/RUL
When calc. Product cost (PC) don’t forget to include VMO from hi-lo
Look out when they say e.g. supervisor does equal work in all dept.
When there’s no Job Cost Card, and you get the FOAR, all. to MH and DLH as per table like if
the product did 300/400 MH, allocate that amount to it in the product cost.
Formats
PRODUCTION DEPT SERVICE DEPT TOTAL
BASIS DEPT 1 DEPT 2 DPET 1 DEPT 2
DM NA NA NA NA NA NA
IDM Given X X X X XX
Supervision Equal X X X X XX
Rent FA X X X X XX
Mac. Ins Value X X X X XX
Buil. Ins FA X X X X XX
Electricity Power X X X X XX
Depreciation BV X X X X XX
Total XX XX XX XX XXXX
Revised all. XX XX XX XX
(Simultaneous)
Dept 1 X X (XX) -
Dept 2 X X - (XX)
Total XX XX
MH
DLH
Rate Rx/ MH Rx/DLH
, Cost Card 2 Products
DM X Saam X Sing Y
DL X DM X X
Prime Cost XX DL: Acc to DLH XX XX
VMO X Circuit X X
FOAR – Dept 1 X Finishing X X
Dept 2 X OH: Acc to CD XX XX
Total Cost XXXX Circuit X X
Mark up X Finishing X X
SP XXXXX Total Cost XXXX XXXX
MU X X
SP XXXXX XXXXX
LINEAR REGRESSION
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