Question
Ellard limited manufactures and sell box files. Ellard ltd has five (5) departments, two production and three service departments. The books of Ellard ltd shows
Ellard limited manufactures and sell box files. Ellard ltd has five (5) departments, two production and three service departments. The books of Ellard ltd shows the following total overheads for the five departments after apportionment were as follow:
BWP | |
Production departments | |
Production Department X | 41,580 |
Production Department Y | 56,890 |
Service Departments | |
Stores Departments | 15,902 |
Maintenance Departments | 7,486 |
Canteen departments | 23,540 |
The following additional information has also been provided:
Production Department X | Production Department Y | Stores Departments | Maintenance Departments | Canteen departments | |
Number of employees | 30 | 40 | 20 | 10 | 20 |
Hours of maintenance | 350 | 150 | 300 | 200 | 0 |
Area Occupied | 450 | 175 | 90 | 50 | 25 |
Machinery value (BWP'000) | 250 | 165 | 90 | 100 | 0 |
Number of requestions | 480 | 420 | |||
Machine hours | 7,500 | 1,100 | |||
Direct labour hours | 4,600 | 5,900 |
Required:
Using the above information, you are re-apportioning of the fixed overheads from service department to both service and production departments (where applicable), using the most appropriate basis. (Use the stepdown method)
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