115000 Insurance Equipment 400000 Employee welfare expenses Cutting (S) Other Information Assembly (S) Storeroom (S) Maintenance (S) 1500000 2500000 1705000 2309000 Value of equipment Floor area 1000 1500 290 900 100 200 300 144 Number of employees Storeroom 40% 40% 20% Maintenance 50% 40% 10% Production Departments Service Departments Requirements Apportioned common overheads among all departments using the suitable base Allocated overheads Cutting (S) Assembly (S) Storeroom (S) Maintenance (S) 20000 30000 25000 27500 Indirect labour salaries Re apportion the overheads cost of service departments to production departments using reciprocal method Electricity cost 150000 200000 79000 89000 5000 7000 8200 5900 Entertainment expenses Common Overheads Rent 20000 100000 Depreciation equipment