Question 4:

The Boatman limited is a manufacturing company. It has two production departments A & B, and one service department, department 1. The overheads incurred in the month of June 2022 are as follows:

POR
	Labour (indirect)	Materials (indirect)
Production dept A	10,000	20,000
Production dept B	15,000	25,000
Service dept 1	5,000	10,000

The indirect expenses were as follows:

POR	$
Rent & rates	10,000
Building repairs	12,000
Maintenance	10,000
Depreciation - machinery	15,000
Canteen	16,000

The indirect expenses are to be apportioned as follows:

Departments	Horse power	Area occupied	Number of employees	Equipmen t cost	Number of bulbs	Working hours
Production dept 1	40	100	20	250,000	10	35
Production dept 2	30	200	25	300,000	25	40
Service dept 1	30	100	5	150,000	15	15
TOTAL	100	400	50	700,000	50	90

The service department overheads are absorbed by the production departments as 60% department A an 40% department B.

Prepare the overhead analysis sheet for the company showing the total overheads attributable to each department.