E ltd comprises of three production departments and two service departments. The following information is provided for
Question:
E ltd comprises of three production departments and two service departments.
The following information is provided for E ltd for 2019
Supervisor's salaries Machining £300,000
Assembly £200,000
Finishing £250,000
Canteen £120,000
Maintenance £150,000
EXPENSES
Factory Rent £300,000
Heat and light £200,000
General Repairs £60,000
Machine Depreciation £80,000
Machine insurance £90,000
Business Rates £75,000
Floor space occupied (m2)
Machining 400
Assembly 200
Finishing 200
Canteen 150
Maintenance 50
Value of machinery ('000)
Machining 300
Assembly 400
Finishing 200
Canteen 50
Maintenance 50
The service departments work for the other departments as follows:
Service carried out by:
Canteen
Machining 30%
Assembly 30%
Finishing 40%
Maintenance
Machining 25%
Assembly 50%
Finishing 25%
Required
(a) Using E ltd overhead analysis sheet for 2019, determine the overhead allocated and apportioned to each of the five departments
(b) Calculate the total overheads included in the production departments after the reapportionment of the service department using direct method
Expert Answer:
Answer Calculation is as follow a Production Department Service Departments It... View the full answer
