The following information relates to the departments of Scaife plc for the year ending 31 December 2013.

The overheads of the service departments are allocated to the production departments on the following basis:
• cutting 75%;
• tooling 25%.
Calculate the overhead absorption rates for the Cutting and the Tooling departments.
State the bases used and why.

Transcribed Image Text:

Overheads Direct machine hours Direct labour hours Production Dept Cutting Tooling 28,800 42,500 4,750 12,750 8,240 2,490 Service Dept Administration 18,600