Question 5 (12 Marks)

In a factory with four production departments and two service departments, the operating costs for the month of October were as shown below. R
Production Department 1	700,000
Production Department 2	300,000
Production Department 3	400,000
Service departments Canteen	78,000
Boiler house	100,000
1,578,000

The costs of running the canteen are apportioned to each department on the basis of the estimated use of the canteen by employees in each department.

The costs of the boiler house are apportioned on the basis of the estimated consumption of power by each department.

The service departments costs are therefore apportioned as follows: Canteen		Boiler house
%		%
Production Department 1	40		30
Production Department 2	20		30
Production Department 3	30		20
Service departments
Canteen	-		20
Boiler house	10		-

Required:

Prepare a statement showing the allocation of costs to the production departments.