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Cost and Management Accounting: Presented By: Mayank Goel

The document discusses the distribution of joint overheads between multiple products when clear information is not provided. It states that factory overhead will be distributed based on direct wages, while office overhead and selling/distribution overhead will be distributed based on factory cost. It then provides a numerical example where a manufacturer produces stools, chairs, and tables, and the total factory overhead is $600,000. The example shows how to calculate the work cost of each product by assuming equivalencies between products for overhead allocation purposes.

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Mayank Goel
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96 views

Cost and Management Accounting: Presented By: Mayank Goel

The document discusses the distribution of joint overheads between multiple products when clear information is not provided. It states that factory overhead will be distributed based on direct wages, while office overhead and selling/distribution overhead will be distributed based on factory cost. It then provides a numerical example where a manufacturer produces stools, chairs, and tables, and the total factory overhead is $600,000. The example shows how to calculate the work cost of each product by assuming equivalencies between products for overhead allocation purposes.

Uploaded by

Mayank Goel
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Cost and Management Accounting

Presentation On: Cost Sheet (Distribution Of Joint Overheads)

Presented By: Mayank Goel

Distribution Of Joint Overheads


In The Joint Amount of overheads is given for
two or more products and clear information about distribution of joint overheads is given, then the distribution of joint overheads will be done accordingly. On the other hand , if no clear information is given then the factory overhead will be distributed on the basis of direct wages while the office overhead and selling and distribution overheads will be distributed on the basis of factory cost.

Numerical Example
Mr. Govind Manufacturers Stools, Chairs, and Tables. The Materials
and wage cost are separated as follows. Materials ` 36 60 440

Stool Chair Table

Wages ` 48 40 120

His Total factory overheads in the year 2006 were ` 6,00,000. You are asked to determine the works cost of each type of furniture after assuming that.

One table is equivalent to four stools. Two chairs are equivalent to one table
For the purpose of overhead allocation. The production during the year was : Stool_ 6,000 Chairs_ 3,000 Tables _600.

Thank You...
From: Mayank

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