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Re-apportion the overhead costs apportioned/allocated to support departments, to the productive departments. Zorro Limited are a manufacturing company. The following information relates to a manufacturing
Re-apportion the overhead costs apportioned/allocated to support departments, to the productive departments.
Zorro Limited are a manufacturing company. The following information relates to a manufacturing business, which has two production departments and two support/service departments Total Machining Finishing 112,500 180,000 Corporate Management Services Services 37,500 67,500 397,500 Allocated overheads General overheads Machine running costs Machine depreciation Premises costs Indirect staff costs 240,075 133,950 714,000 120,000 The following information is also available: Production Depts Service Depts Corporate Services Management Services Machine Hours Machine Value () Floor Area (Sq. Mtrs.) Number of staff Labour hours TOTAL 82,500 3,525,000 10,500 60 157,500 Machining 75,000 3,150,000 7,500 40 56,250 Finishing 7,500 375,000 1,500 10 67,500 750 5 22,500 750 5 11,250 The 2 Support Depts carry out work for the production Departments but do not do work for each other. The overheads costs allocated/apportioned to the Corporate Services department are to be reapportioned between the productive departments, on the basis of staff numbersStep by Step Solution
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