Akmal Bhd. reapportions the costs incurred by two service departments, materials handling and inspection, to the...

Transcribed Image Text:

Akmal Bhd. reapportions the costs incurred by two service departments, materials handling and inspection, to the three production departments, machining, finishing and assembly. The following are the overhead costs which have been allocated and apportioned to the five departments: RM Machining Finishing Assembly Materials handling Inspection 400,000 200,000 100,000 100,000 50,000 Estimates of the benefits received by each department are as follows: Machining Finishing Assembly Materials Inspection handling % % Materials handling Inspection 30 25 35 45 20 30 10 Required: a) Calculate the charge for overhead to each of the three production departments, including the amount reapportioned from the two service departments, using the linear equation method. b) Discuss the difference(s) between common costs and joint costs. (6 marks) Akmal Bhd. reapportions the costs incurred by two service departments, materials handling and inspection, to the three production departments, machining, finishing and assembly. The following are the overhead costs which have been allocated and apportioned to the five departments: RM Machining Finishing Assembly Materials handling Inspection 400,000 200,000 100,000 100,000 50,000 Estimates of the benefits received by each department are as follows: Machining Finishing Assembly Materials Inspection handling % % Materials handling Inspection 30 25 35 45 20 30 10 Required: a) Calculate the charge for overhead to each of the three production departments, including the amount reapportioned from the two service departments, using the linear equation method. b) Discuss the difference(s) between common costs and joint costs. (6 marks)

Answer rating: 100% (QA)

Requirement No 1 Answer Let A B be total overhead of material handling department Inspection departm... View the full answer