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Question 3 (Note that you have to show all your calculations) (30 pts in total) In a company, we have 4 service departments and 3
Question 3 (Note that you have to show all your calculations) (30 pts in total) In a company, we have 4 service departments and 3 manufacturing departments. A total of $280.000 overhead cost will be assigned to departments on the basis of "No. of workers": SERVICE DEPARTMENTS S2 200 MANUFACTURING DEPARTMENTS M1 M2 M3 500 600 700 100 Total Labour hours 7.000 DL 2,000 No. of 6 workers Materials 1,000 2,000 3,000 4,000 tonnes used Machine 1,000 2,000 5,000 hours 100 200 200 hours No. of 10 20 30 40 50 1 60 70 parts m 1.000 1.000 1.000 1.000 1,000 3,000 The allocation bases (for each department) can be given as follows: S1. Total Labour hours, S2 No. of workers S3 Materials tonnes used 54. No of parts In addition, in order to assign manufacturing department costs to products, the following allocation bases will be used MI: Machine hours, M2 DL hours, M3 m2 Required: a) Please assign overhead costs to the departments (5 pts) b) Please assign service department costs to production departments by using "Step-down method" (15 pts) c) Assume that Product A requires 5 machine hours in Mi, 20 direct labour hours in M2, 20 m' in M3 to be completed. Please calculate overhead cost to be assigned to the Product A (10 pts)
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