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SNS Trading Company has three Main Departments and two Service Departments. The data for each department is given below: Departments Main Department: Expenses (in) Area
SNS Trading Company has three Main Departments and two Service Departments. The data for each department is given below: Departments Main Department: Expenses (in) Area in (Sq. Mtr) Number of Employees Purchase Department 5,00,000 12 Packing Department Distribution Department 8,00,000 3,50,000 15 257 800 1700 700 Service Departments: Maintenance Department Personnel Department 6,40,000 4 3,20,000 6 200 250 The cost of Maintenance Department and Personnel Department is distributed on the basis of 'Area in Square Metres' and 'Number of Employees' respectively. You are required to: (i) Prepare a Statement showing the distribution of expenses of Service Departments to the Main Departments using the "Step Ladder method" of Overhead Distribution. (ii) Compute the Rate per hour of each Main Department, given that, the Purchase Department, Packing Department and Distribution Department works for 12 hours a day, 24 hours a day and 8 hours a day respectively. Assume that there are 365 days in a year and there are no holidays
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