X Ltd has two production departments, Assembly and Finishing, and two service departments, Stores and Maintenance. Stores provides the following service to the production departments: 60% to Assembly and 40% to Finishing. Maintenance provides the following service to the production and service departments: 40% to Assembly, 45% to Finishing and 15% to Stores. The budgeted information for the year is as follows: 

At the end of the year after apportioning the service department overheads, the total fixed production overheads debited to the Assembly department’s fixed production overhead control account were £180,000. The actual output achieved was 120,000 units. 

Required

1. Calculate the under/over absorption of fixed production overheads for the Assembly department.

Transcribed Image Text:

Budgeted fixed production overheads Assembly £100 000 Finishing £150 000 Stores £50 000 Maintenance £40 000 Budgeted output 100 000 units