Question
Excellent Manufacturing works have two production departments: Mixing and curing and three service departments: Time Office, Stores and Maintenance. The following details are available from
Excellent Manufacturing works have two production departments: Mixing and curing and three service departments: Time
Office, Stores and Maintenance. The following details are available from the Departmental Distribution Summary for the
month of July, 2001:
Rs.
Rs.
Production Departments:
Service Departments:
Mixing
Curing
Time Office
Stores
Maintenance
1,44,000
96,000
48,000
60,000
36,000
2,40,000
1,44,000
The following relevant data are also available:
Production Department
Service Department
Mixing
Curing
Time Office
Stores
Maintenance
No. of employees
20
15
10
No. of Stores Requisition
processed
120
100
-
Machine hours
3,600
2,400
The company consistently follows the method of Secondary Distribution on non-reciprocal basis. Show the
apportionment of the cost of Service Departments to Production Departments stating the basis of computation in
the form of a
note at the end of the exercise.
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