The Harlton Manufacturing Company uses job costing. The Company has four production departments and three service departments. Indirect labour and other indirect costs for a typical month have been allocated as shown:

In the Grinding and Firing departments, job costing uses an overhead rate per machine hour; in Blending and Polishing, an overhead rate per direct labour hour is used.
Machine hours worked are 611 in Grinding, and 520 in Firing. Direct labour hours worked are 1,034 in Blending, and 431 in Polishing.
Required:

(a) Calculate the overhead recovery rates for each of the production departments. (20 marks)

(b) Use your answers to calculate the cost of job number 84/1 which incurs the following costs:

Transcribed Image Text:

HARLTON MANUFACTURING COMPANY Production Departments Service Departments Grinding Blending Firing Polishing Personnel Admini- Main- stration tenance Indirect labour () 4.600 3.300 5 400 2.900 700 1.800 800 Other indirect costs () 1 400 1 200 2.800 1 600 500 300 1 200 The service departments' costs are allocated as follows: Grinding Blending Firing Polishing Admini- Main- stration tenance Personnel (%) 15 25 Administration (%) 10 30 Maintenance (%) 15 35 4455 30 40 955 20 5 5 15 5