Assume that a manufacturing company has three production department Pl P and P 

 

respectively and two service department and Data for May is provided in the

following table. The allocation bases to be used are as follows:

Personnel services are allocated on the basis of number of labour hours

Building and grounds are allocated on the basis of square meters.

Production department overhead rates are calculated on a departmental basis, and

allocation bases include labour hours, machine hours, and units of production.

a Calculate costs of production department and the overhead rates for the three 

 

production departments using.

 

i Direct method

ii Stepdown method

iii. Reciprocal method