In a factory, four types of jobs are performed in separate production departments A, B, C and D. In addition there are three service departments, K, L and M. Costs have been allocated to the departments as follows:

The expenses of the service departments are to be allocated between other departments as follows:

Dept K to Depts A 20 per cent: B 25 per cent: C 30 per cent: D 15 per cent: M 10 per cent.

Dept L to Depts A 35 per cent: C 45 per cent: D 20 per cent.

Dept M to Depts B 40 per cent: C 25 per cent: D 35 per cent.

In departments A and C the job costing is to use an overhead rate per direct labour hour, while in B and D a machine hour rate will be used. The number of direct hours and machine hours per department is expected to be:

You are required to calculate:

(a) The overhead rates for departments A and C.

(b) The overhead rates for departments B and D.

Transcribed Image Text:

Indirect labour Other expenses A f 8,000 5,400 Production departments B с £ £ 12,000 6,200 16,000 7,200 D £ 4,000 3,000 Service departments K £ 3,000 9,000 L £ 6,000 4,000 M £ 8,200 4,000