2. Brimstone Ltd Brimstone Ltd operates a production facility for which the budgeted production overhead for the soon to commence financial year is as follows: Expense: Indirect Materials Indirect Labour Machining Dept. 13,000 26,400 Assembly Dept. 16,300 19,800 Packing Dept. 8,100 16,700 Maintenance Dept. 21,000 36,000 Stores Dept. 5,700 31,600 Management/Clerical Dept. 2,500 49,000 Other Expenses: Rent and Rates 41,400 Light and Heat 37,900 Insurance 32,700 Depreciation 168,600 Power 48,300 The following information is also available: Dept Book Value Area Sq. Elec Material Employees Machine Direct of Machinery Metres (Kw) Requisitions Hours and Labour Hours Equipment '000 '000 Production Machinery 940 1,800 300 10 75 23,000 90,000 Assbly. 520 1,400 170 6 45 21,500 57,000 Pack. 130 1,060 4 30 36,000 Service Maint 200 920 60 Stores 100 1,240 Mgmt. 75 680 Requirement: (a) Prepare a production overhead analysis sheet for the departments of the factory, showing your bases of allocation/apportionment. (Note: In spreading the service dept. subtotals no account is to be taken with respect to distributing any of their costs among each other.) Calculate, in the light of the data presented in the question, the most appropriate hourly absorption rates for each productive department. | |