Swift Metals Limited: Apportionment of production overheads, year ending 31 December 20X4 Cost centre Total Preparation Tooling Finishing Basis

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Factory costs Floor area 700 000 245 000 315 000 140000 Canteen costs Employees 18496 8 704 6 528 3 264 Machinery depreciation Net book value 17 650 2 600 11 200 3 850 Machinery maintenance and repair Call-outs 2 961 658 1 974 329 Supervisory salaries Employees 23 358 10 992 8 244 4122 Totals 762 465 267 954 342 946 151565 Tutorial note: by contrast with the Choremaster example, note that supervisory salaries for Swift Metals are apportioned on the basis of the number of employees supervised. Remember, there are no fixed rules about the way in which costs are apportioned - the basis of apportionment is whatever is most appropriate for the business.