Anna has given Sam the following management accounting information. She has estimated that Smart Sports’ total manufacturing costs for 2018 will include the hire of machinery: £4,000 for the printing machine and £6,600 for the frame machine. She expects to be paid £30,000. There will also be the factory rent of £40,000, depreciation of £3,000, and electricity costs of £1,500. She has also given Sam the data shown in table 11.2 for his manufacturing departments.

Required:

a) Allocate and apportion these estimated costs to calculate a total estimated cost for the year for each of Smart Sports’ manufacturing departments.
Complete Table 11.3. The solution for team kit-printing has been given as an example.

b) Re-apportion the maintenance department’s costs over the kit-printing and frame-making departments, assuming that the maintenance staff spend 3,000 hours in kit-printing and 2,000 hours in frame-making. Complete Table 11.4.

Each manufacturing department now has a total budgeted overhead cost from which a departmental rate can be calculated.

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Table 11.2 Manufacturing department data Team Frame- Racquet- Maintenance kit-printing making stringing Total Supervisor 50% 25% 25% 100% (% time per department) Floor space 5,000 3,000 1,000 1,000 10,000 (square metres) Net book 12,000 16,000 2,000 nil 30,000 value of equipment () Electricity used 20,000 8,000 2,000 nil 30,000 (kilowatt hours)