A company comprises 3 production cost centers and 2 service cost centers. Budgeted overheads for the year commencing 1^st July 2000 amount to 4900, 000 made up as follows:

Indirect Material Indirect Wages total

Allocated overheads 000 000

Heavy machine shop P 260 764

P2 Light machine shop 330 896

P3 Assembling Shop 150 400

S1 Materials services 40 228

S2 Personal Services 20 132

800 2420 3220

Apportionable overheads:

Rent and rates 300

Depreciation (machinery) 900

Insurance (machinery) 180

Insurance (building) 60

Power 120

Light and heat 120 1680

4900

Relative quantitative data have been converted into percentages as follows to facilitate apportionment.

Cost Centres

P1 P2 P3 S1 S2

Floor area 25 30 20 15 10

Book value of machine 35 45 15 5 -

Power usage 40 45 10 5 -

Value of stores issues 40 50 10 - -

Number of employees 35 45 10 - -

Budgeted product capacity is:

P1 P2 P3

Machine hours (000) 600 800 -

Personnel hours (000) --- --- 45

Required:

1. Draw up a suitable columnar form and using appropriate basis distribute the budgeted overheads over the five cost centres
2. Apportion the accumulated cost of the two service cost centres over the three production cost centres using suitable basis.
3. Calculate an overhead absorption rate for each of the three production cost centres.