Makemore has three departments: Departments A and B are production and Department C is a service support department. It apportions its overheads as follows (see brackets):

£

Supervisors’ salaries (number of employees) 25,000 Computer advisory (number of employees) 18,000 Rent and business rates (floor area) 20,000 Depreciation on machinery (cost) 21,000 Repairs (actual spend) 4,000 84,000 You have the following information:

(a) Department A 1,000 employees, B 2,000 employees, C 500 employees.

(6) Department A 10,000 sq. feet, B 6,000 sq. feet, and C 4,000 sq. feet.

(c) Department A machinery costs £30,000, B machinery costs £15,000.

(d) Repairs are £2,800, £1,100 and £100, respectively, for departments A, B and C.

(e) Department C’s facilities will be reallocated 60% for A and 40% for B.

(f) Department Department A B Direct labour hours 80,000 40,000 Machine hours 100,000 200,000 Required:

An apportionment of the overheads to products A and B

(i) using direct labour hours, and a

(ii) using machine hours.