Question
Prod 1 Prod 2 Stores dept Maintenance dept Overhead costs $ 24,000 16,000 10,000 8,000 Cost of material requisitions 40,000 35,000 - 15,000 Mnance hours
| Prod 1 | Prod 2 | Stores dept | Maintenance dept |
|
Overhead costs $ | 24,000 | 16,000 | 10,000 | 8,000 |
|
Cost of material requisitions | 40,000 | 35,000 | - | 15,000 |
|
Mnance hours needed (hrs) | 8,000 | 4,500 | 1,500 |
|
|
Required:
a) Use the repeated distribution method to apportion the overhead costs of the two service centres
b) Ascertain the total overhead costs of the production departments
c) Compare the overall cost of the production departments using the repeated distribution method and the traditional overhead absorption method.
d) Comment on the benefits or drawbacks of using the repeated distribution method of overhead absorption
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started