CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 68 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 68
Topic #: 1

A company has two production departments and two service departments (Maintenance and Stores). The overhead costs of each of the departments are as follows.

The following equations represent the reapportionment of each of the service department overheads to the other.

M = 4,700 + 0.1S

S = 5,800 + 0.2M

Where M = total Maintenance overhead after reapportionment from Stores

S = total Stores overhead after reapportionment from Maintenance

60% of the total Maintenance overhead and 50% of the total Stores overhead are to be apportioned to Production Department 1.

The total production overhead for Production Department 1 after reapportionment of the service departments' overhead costs is closest to:

A$71,672

B$75,500

C$70,720

D$71,821

Show Suggested Answer

Suggested Answer: C

by Rosendo at Apr 21, 2024, 01:37 AM

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Truman

6 months ago

I agree with you, D. Let's double-check our calculations before finalizing our answer

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Reena

7 months ago

I believe the answer will be closest to $71,672 because of the calculations we have done

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Tawny

7 months ago

After calculating, we can then allocate the overhead costs to Production Department 1 based on the given percentages

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Carole

7 months ago

Yes, let's start by substituting the values of M and S into the equations

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Sherron

7 months ago

I think we need to calculate the reapportionment of overhead costs first

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Paola

8 months ago

That makes sense. The equations for reapportionment were quite complex.

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Jacklyn

8 months ago

I believe it is closest to $75,500.

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Paola

8 months ago

What do you think is the total production overhead for Production Department 1?

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