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Zorluk: Çok zorAllocation and Apportionment of Expenses among Departments

Apex Enterprises operates three departments: Department A, Department B, and Department C. During the year ended 31st December 2025, total insurance premium paid was ₦520,000₦520,000, which includes an unexpired insurance (prepayment) of ₦70,000₦70,000.

It was ascertained that of the net insurance cost:
- 60%60\% relates to factory building insurance, which is apportioned on the basis of floor space area.
- 40%40\% relates to plant and machinery insurance, which is apportioned on the basis of book value of machinery.

The departmental details are provided below:
- Floor Space (sq. meters): Dept A = 1,5001,500; Dept B = 2,0002,000; Dept C = 1,5001,500
- **Book Value of Machinery (₦₦)**: Dept A = ₦1,200,000₦1,200,000; Dept B = ₦800,000₦800,000; Dept C = ₦2,000,000₦2,000,000

What is the total amount of insurance expense to be apportioned to Department B?

Cevap: 144000 ₦

Cevap

The total insurance expense apportioned to Department B is ₦144,000₦144,000.
To compute the total insurance cost for Department B, the net insurance expense (₦450,000₦450,000) after deducting the ₦70,000₦70,000 prepayment is divided into building insurance (₦270,000₦270,000) and machinery insurance (₦180,000₦180,000). Department B occupies 2,0005,000\frac{2,000}{5,000} (40%40\%) of total floor space, incurring ₦108,000₦108,000 for building insurance, and holds 800,0004,000,000\frac{800,000}{4,000,000} (20%20\%) of total machinery value, incurring ₦36,000₦36,000 for machinery insurance. Adding both components gives ₦144,000₦144,000.

Adım Adım Çözüm

1
Adjust total insurance paid for prepayment to get the net expense for the current period.
Net Insurance Expense = ₦520,000−₦70,000=₦450,000₦520,000 - ₦70,000 = ₦450,000.
Only the expense relating to the current financial year should be apportioned among departments.
2
Divide net insurance expense into building insurance and machinery insurance.
Building Insurance = 60%×₦450,000=₦270,00060\% \times ₦450,000 = ₦270,000; Machinery Insurance = 40%×₦450,000=₦180,00040\% \times ₦450,000 = ₦180,000.
Each type of insurance has a different equitable basis of apportionment.
3
Determine Department B's portion of building insurance using floor space ratio.
Total floor space = 1,500+2,000+1,500=5,0001,500 + 2,000 + 1,500 = 5,000 sq. meters. Department B share = 2,0005,000×₦270,000=₦108,000\frac{2,000}{5,000} \times ₦270,000 = ₦108,000.
Building rent and insurance expenses are equitably apportioned based on floor space occupied.
4
Determine Department B's portion of machinery insurance using book value of machinery ratio.
Total machinery value = ₦1,200,000+₦800,000+₦2,000,000=₦4,000,000₦1,200,000 + ₦800,000 + ₦2,000,000 = ₦4,000,000. Department B share = 800,0004,000,000×₦180,000=₦36,000\frac{800,000}{4,000,000} \times ₦180,000 = ₦36,000.
Machinery insurance is apportioned based on the capital values/book values of the machinery in each department.
5
Sum Department B's shares from both building and machinery insurance.
Total Department B Insurance = ₦108,000+₦36,000=₦144,000₦108,000 + ₦36,000 = ₦144,000.
The total expense charged to Department B is the sum of all individual apportioned overhead costs.

Anahtar Kavram

Dual-basis apportionment of departmental expenses with accrual/prepayment adjustments
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Konular

Allocation and Apportionment of Expenses among Departments

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