Discuss the importance of allocating overheads among production and service departments, including the final apportionment of service centre costs to production centres.

Assignment Brief

Module Title:

Managerial Accounting

Module Code:

AFE_4_MAC

Assignment No/Title:

1

Assessment Weighting:

50%

Submission Date:

03/04/2026

Feedback Target Date:

Submission Instructions:

This assignment is to be submitted electronically

 This assignment must be submitted electronically by 2.00 pm on the submission date.

1. To submit electronically you must upload your work to the e-submission area within the respective module on Moodle.
2. Multiple drafts can be submitted up to the submission date.
3. Please remember you must leave at least 24 hours between submissions if you make changes to your work. Each submission will overwrite the previous one until the due date and time has passed.
4. You are reminded of the University’s regulations on cheating and plagiarism. In submitting your assignment, you are acknowledging that you have read and understood these regulations.
5. You are reminded that it is your responsibility to keep an electronic copy of your assignment for future reference.
6. Your citation needs to follow the Harvard style referencing. 

The Assignment Task(s)

This Assignment was developed to assess the following Learning Outcomes: 

• Explain the rationale for costing, and the nature and behaviour of various types of cost within organisations.
• Apply costing processes to serve various purposes within the organisation.

 Assignment brief (Coursework 1)

Research based coursework.

Task 1.1: Explain the various types of cost classification.Discuss the importance of allocating overheads among production and service departments, including the final apportionment of service centre costs to production centres. (20 marks)

Task 1.2: Using the appendix data provided on the following page, prepare a schedule of overhead allocation and apportionment, clearly indicating the basis used for apportioning each overhead, calculate the unit cost of production under the marginal and absorption costing methods. (20 marks)

15 marks available for correct calculation and 5 marks for good, formatted presentation. Excel spreadsheet can be used. Work to 2 decima places.

Task 1.3: Budgeting is a vital tool in management accounting that helps organizations plan, control, and coordinate their financial activities.It provides a systematic approach to estimating future income and expenditure, enabling management to make informed decisions and achieve organizational objectives efficiently.

• Explain the significance of budgeting in an organisation with practical examples.(20 marks)

• Critically analyse imposed budget and participatory budget, comparing their advantages, disadvantages, suitability and practical applications (30 marks) 
• 10 Marks will be awarded for organization, clarity of presentation, and accurate referencing.

You are required to incorporate in-text citations, quotations, and a variety of practical examples.

Your report must be supported by management accounting literature - you must therefore include references using Harvard referencing standard.  

Your essay must show clear evidence of research through correctly citing various sources throughout the report and providing a complete set of references that follow the Harvard style of referencing.

Submission date: 03/04/2026

Time: 2:00 PM

Appendix

Bucks has two production departments and two service departments. Production overheads are expected to be as follows:

The following information is also available:

Each of the production staff is expected to work 33 hours per week for 50 weeks.

Apportionment of service centres:

Additional information: the production manager has provided other costing information: direct material cost is £3.50 per unit, and 2 hours of direct labour hour is required per unit in both departments and workers are paid at £35 per hour. The company absorbed overhead based on labour hours.