Suppose you get these information that related to H&M and as CFO, you must calculate the overhead cost based on these workflow:



The cutting and labelling department can’t be operated without support from maintenance and cafeteria division. Also, the changes in product will be affect and support all the related producing division and office support division. 

Additional Information: 

a. The total overhead for cafeteria department is $50,000 with the support percentage: 40% for cutting department, 30% for labelling department, 20% for maintenance and the rest is for Product design department. 

b. The total overhead for maintenance department is $50,000 with the support percentage: 40% for cutting department and 60% for Labelling, Cafeteria, and Product Design with the same amount per each of them. 

c. The total overhead for Product design department is $20,000 with the support percentage: 10% for cutting department, 60% for labelling department and for the rest percentage, a half for marketing division and a half for office administration division. 

d. The total overhead cost for cutting department: $200,000 and $60,000 for labelling department. 

Required: 

a. Explain about the departments in the H&M based on the data above (hint: there must be one department that produce the product).

b. Compute the overhead cost for each department (hint: you must know the allocation method first) 

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