Question # $1$ Allocation of overheads

ABC LLC is a jobbing engineering concern which has three production departments $($forming$,$ machines and

assembly$)$ and two service departments $($maintenance and general$).$

The following analysis of overhead costs has been made for the year just ended.

$

Rent and rates $8,000$

Power $750$

Light, heat $5,000$

Repairs, maintenance:

$-$ Forming $800$

$-$ Machines $1,800$

$-$ Assembly $300$

$-$ Maintenance $200$

$-$ General $100$

Total Repairs, maintenance $3,200$

Departmental expenses:

$-$ Forming $1,500$

$-$ Machines $2,300$

$-$ Assembly $1,100$

$-$ Maintenance $900$

$-$ General $1,500$

Total Departmental expenses $7,300$

Depreciation:

$-$ Plant $10,000$

$-$ Fixtures and fittings $250$

Insurance:

$-$ Plant $2,000$

$-$ Buildings $500$

Indirect labour:

$-$ Forming $3,000$

$-$ Machines $5,000$

$-$ Assembly $1,500$

$-$ Maintenance $4,000$

$-$ General $2,000$

Total overhead costs

Other available data are as follows.

$52,500$

Floor

area.

Sq$.$ft$.$

Plant

value $

Fixtures

and

fittings. $

Effective

horse

power

Direct cost

for the

year,

$

Labor

hours

worked

Machine

hours

worked

Forming $2,00025,0001,0004020,50014,40012,000$

Machines $4,00060,0005009030,30020,50021,600$

Assembly $3,0007,5002,0001524,20020,2002,000$

Maintenance $5007,5001,0005---$

General $500-500----$

Total $10,000100,0005,00015075,00055,10035,600$

Service department costs are apportioned as follows.

Maintenance General

$\%\%$

Forming $2020$

Machines $5060$

Assembly $2010$

General $10$

Maintenance $10$

Required

$1.$ Using the data provided prepare an analysis showing the distribution of overhead costs to

departments.

$2.$ Reapportion costs of service departments to production departments using the reciprocal

method.

i dont understand other solutions which is present on chegg, thats why i am posting it here.