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Anglo Co. Ltd has three production departments X, Y, Z and two departments A and B. The following estimated figures for a certain period have
Anglo Co. Ltd has three production departments X, Y, Z and two departments A and B. The following estimated figures for a certain period have been made available: Rent and Rates $10,000 Lighting and Electricity $1,200 Indirect Wages $3,000 Power $3,000 Depreciation of Machinery $ 20,000 Other Expenses and Sundries $20,000 Following further details are also available: Total X Y Z A B Floor Space (sq. mts) 10,000 2,000 2,500 3,000 2,000 500 Light Points (Nos.) 120 20 30 40 20 10 Direct Wages ($) 20,000 6,000 4,000 6,000 3,000 1,000 Horsepower of machines 300 120 60 100 20 Cost of Machinery ($) 1,00,000 24,000 32,000 40,000 2,000 2,000 Working hours 4,670 3,020 3,050 The expenses of the service departments of A and B are to be allocated as follows: X Y Z A B A 20% 30% 40% 10% B 40% 20% 30% 10% You are required to calculate the overheads absorption rate per hour in respect of the three production departments. What will be the total cost of an article with material cost of $ 80 and direct labour cost of $40 which passes through X, Y and Z departments for 2, 3 and 4 hours, respectively
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