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A firm supplied the following information: Budgeted overhead costs (service cost centre): Maintenance of buildings N$45 000 Budgeted factory overheads (production cost centres): Machining N$120
A firm supplied the following information: Budgeted overhead costs (service cost centre): Maintenance of buildings N$45 000 Budgeted factory overheads (production cost centres): Machining N$120 750 Assembling N$205 000 Budgeted direct Area labour hours (m2) Maintenance 1 000 Machining 2000 2 600 Assembling 10 000 1 400 Total 12 000 5 000 Management has decided to use the area as basis to apportion the cost of the service cost centre between the production cost centres. It has further decided to use the direct labour hours as basis to compute the overhead rates of the production cost centres. Determine Machining department's overhead absorption rate
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