CIMAPRA17-BA2-1 Exam - Topic 4 Question 85 Discussion

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

Question #: 85
Topic #: 4

Refer to the exhibit.

WS operates an integrated accounting system. Transactions relating to production overheads for the month of May were as follows:

Indirect Material costs were $15,000

Indirect Labour Costs were $45,000

Production overheads of $58,000 were incurred during the period.

Depreciation of factory machinery amounted to $32,000.

Overheads costs absorbed by production using a standard absorption rate was $164,000 for the period.

What are the correct entries to record the absorption of production overheads for the period?

The correct set of entries to record the absorption of production overheads for the period is:

Show Suggested Answer

Suggested Answer: B, C, E

https://www.cgma.org/resources/reports/globalmanagementaccountingprinciples/about-the-principles.html#?tab-1=3

by Stevie at Oct 19, 2024, 11:36 AM

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Benton

8 months ago

I’m not sure about those entries, feels off to me.

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Jani

8 months ago

Overheads absorbed were $164k, right? Seems high!

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Mammie

8 months ago

Wait, how does depreciation fit into the absorption rate?

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Danica

8 months ago

Totally agree, those numbers are key for overhead calculations!

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Odette

9 months ago

Indirect materials were $15k, indirect labor $45k.

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Willis

9 months ago

I feel like I should know this, but I can't recall if we need to adjust for any variances in the overhead absorption.

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Lindsey

9 months ago

This reminds me of a similar practice question where we had to calculate total overheads. I hope I can remember the correct entries for this one!

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Alva

9 months ago

I think the absorption of production overheads should include all the indirect costs, but I'm confused about how depreciation fits into the entries.

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Kallie

9 months ago

I remember we practiced a question about overhead absorption rates, but I'm not sure how to apply it here with the different costs listed.

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Erin

9 months ago

I feel pretty good about this question. The information is laid out clearly, and I just need to apply the principles of absorption costing to determine the proper accounting entries.

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Glory

9 months ago

This is a tricky one. I'm not totally confident I know the right approach, but I'll give it my best shot and try to eliminate the incorrect options.

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Maryann

9 months ago

Okay, I think I've got a handle on this. The key is to match the actual overhead costs incurred with the overhead costs absorbed into production. I'll walk through the numbers step-by-step.

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Matilda

9 months ago

Hmm, I'm a bit unsure about this one. There are a lot of numbers to keep track of. I'll need to take my time and make sure I understand how the production overheads are being absorbed.

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Erasmo

10 months ago

This looks like a straightforward question on absorption costing. I'll need to carefully review the information provided and think through the correct accounting entries.

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