The monthly production overheads for Toy Craft Ltd are as follows:

The business has two production cost centres and one service cost centre, details of which are given below.

Required

(a) Decide on a suitable basis of apportionment for each of the indirect costs that are not going to be allocated and construct a production overhead analysis for Toy Craft Ltd.

(b) Calculate the machine hour overhead absorption rate for the machine department.

(c) Calculate the direct labour hour overhead absorption rate for the assembly department.

Transcribed Image Text:

Production overheads Indirect materials 24,500 Indirect labour 54,500 Rent and rates 26,000 Electricity 4,000 Depreciation on machinery 36,000 Supervisors' salaries 42,000