Scar Limited has two production departments and one service department. The following information relates to January 2016: 

The allocated expenses shown above are all indirect expenses as far as individual units are concerned. 

The benefit provided by the service department is shared among the production departments A and B in the proportion 60 : 40. 

Required:

Calculate the amount of overhead to be charged to specific units for both production department A and production department B.

Transcribed Image Text:

Allocated expenses: Production department: A B Service department 4 65 000 35 000 50 000