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A factory operated by Edgemead Enterprises comprises two production cost centres (A and B) and two service cost centre (X and Y). The total
A factory operated by Edgemead Enterprises comprises two production cost centres (A and B) and two service cost centre (X and Y). The total primary allocated and apportioned overhead for each cost centre is as follows: A B R1 900 000 R1 650 000 X R950 000 Y R600 000 A cost analyst at Edgemead Enterprises has estimated that each service cost centre provides service for other cost centres in the following proportions: A B X Y Percentage of service cost centre X to: 50 50 Percentage of service cost centre Y to: 30 60 10 The re-apportionment of service cost centre costs (i.e., secondary allocations) to other cost centres fully reflects the above proportion. Required: After re-apportionment of service cost centre costs has been carried out, what is the total overhead for production cost centre B?
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