Alexia Muchala Ltd has two production departments, A and B, and two service

departments, X and Y.

The budgeted activity levels for June 2020 were thus:

A 2000 hours N$ 80,000

B 12,000 hours N$ 48,000

The service departments are apportioned thus:

X 70% to A

20% to B

10% to Y

Y 50% to A

30% to B

20% to X

During June 2020 the actual results were:

A 2100 hours N$ 60,000

B 11,500 hours N$ 40,000

X N$ 25,000

Y N$ 15,000

2

Required:

a) Calculate the budgeted overhead absorption rate per hour for each of the

production departments. (4 marks)

b) Calculate the amount of overhead to be charged to each of the production

departments. (9 marks)

c) Calculate the Actual overhead absorption rate per hour for each of the

production departments. (6 marks)