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Q1 Allocate and apportion the following overhead costs to the production and service departments. Overhead costs Heat and light 40,000 Factory supervision 60,000 Indirect labour

Q1

Allocate and apportion the following overhead costs to the production and service departments.

Overhead costs

Heat and light

40,000

Factory supervision

60,000

Indirect labour

80,000

Indirect materials

20,000

Depreciation on machinery

10% of value of machines

Administration costs

30,000

Rent and rates

16,000

Departmental information

Production dept.

Service dept.

A

B

C

Maintenance

Canteen

Indirect

labour

17,000

26,080

24,750

7,240

4,930

Indirect

material

8,000

6,000

6,000

Area (sq m)

7,000

10,000

6,000

4,000

5,000

Number of

employees

12

17

13

6

12

Value of

machinery

50,000

80,000

40,000

Do an overhead analysis sheet. Reapportion the canteen costs then the maintenance of machinery department costs on the most suitable basis.

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