Question
Let us assume that Company X is a manufacturing company and it has both service and production departments as shown in the table belowSERVICE DEPARTMENTSPRODUCTION
Let us assume that Company X is a manufacturing company and it has both service and production departments as shown in the table belowSERVICE DEPARTMENTSPRODUCTION DEPARTMENTSR&MWarehouseMachinery AssemblyR&M-200 services600 services200 servicesWarehouse300 services-400 services300 servicesFOH ($)80,00050,000100,000200,000Required: a)Please assign service department costs to production departments by using AlgebraicMethod (20pts)b)Assume that total machine hours in the machinery department are 20,000 and total direct labour hours in the assembly department are 10,000. Please calculate overhead application ratesfor both Machinery and Assembly Departments(5p)c)Assume that Product A requires ten machine hours(in the machinery department)and twentydirect labour hours(in the assembly department)to be completed. Please calculate overhead cost to be assigned to Product A. (5p)
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