2. The overhead costs for Subramanyam Ltd. with three production departments (two machine shops and one assembly shop) and two service departments (stores and maintenance) are as follows:

	(Rs.)	(Rs.)
Indirect Wages and Supervision:
Machine Shop: X	100,000
Y	99,500
Assembly	92,500
Stores	10,000
Maintenance	60,000	3,62,000
Indirect Materials:
Machine Shop: X	100,000
Y	100,000
Assembly	40,000
Stores	4,000
Maintenance	9,000	2,53,000
Other overhead costs Lightening and Heating	50,000
Rent	100,000
Insurance of machinery	15,000
Labour Welfare Expenses	25,000
Depreciation of machinery	150,000
Insurance of Buildings	25,000
Salaries of Works Management	80,000	4,45,000
		10,60,000

The following information is also available:

Particulars	Total	Machine Shop: X	Machine Shop: Y	Assembly	Stores	Maintenance
Book Value of Machinery (Rs.)	15,00,000	8,00,000	5,00,000	1,00,000	50,000	50,000
Area Occupied (sq.mts.)	50,000	10,000	5,000	15,000	15,000	5,000
No. of Employees	100	30	20	30	10	10
Direct Labour Hours	5,50,000	2,00,000	1,50,000	2,00,000
Machine Hours	1,50,000	1,00,000	50,000

Subramanyam Ltd. apportions other overhead costs on the basis of the following drivers:

Other overhead costs Drivers

Lightening and Heating Area

Rent Area

Insurance of machinery Book value of machinery

Labour Welfare Expenses No. of employees

Depreciation of machinery Book value of machinery

Insurance of Buildings Area

Salaries of Works Management No. of employees

Maintenance department records indicate that the amount of time spent on maintenance work in other departments is as follows:

Machine Shop X 12,000 hours

Machine Shop Y 8,000 hours

Assembly 3,000 hours

Store 2,000 hours

25,000 hours

Details of total materials issues (direct and indirect) to the departments by the Store are as follows:

(Rs.)

Machine Shop X 400,000

Machine Shop Y 200,000

Assembly 120,000

Maintenance 80,000

800,000

Required:-

1. Allocate and apportion the overheads to the production and service departments and prepare an overhead analysis sheet.
2. The Company has decided that the Absorption Rate will be calculated as thus:

Department Basis of Absorption Rate

Machine Shop X Machine Hours

Machine Shop Y Machine Hours

Assembly Direct Labour Hours

You are required to determine the Absorption Rates.