A private college has two teaching departments: languages and science. The college also has a library and a staff refectory, both of which provide services to the teaching departments. The library staff also eat in the refectory. The college administrator feels that the benefits of the staff refectory are best measured in proportion to the number of staff in each department.

The benefits of the library are best measured in proportion to the number of students in each department. The overhead costs of each department, and other relevant details, are as follows:

Required (1) Prepare a cost apportionment of overhead costs using the step method.
(2) Use a computer-based spreadsheet to calculate the apportionment of overheads using the repeated distribution method.

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Overhead costs allocated () Number of staff Number of students Languages 20,000 4 400 Science 15,000 4 300 Library Refectory 12,000 2 Total 10,000 57,000 - 2 1