Express Co. Ltd is an electronic company, manufacturing sophisticated parts for a product. In a subsidiary,...

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Express Co. Ltd is an electronic company, manufacturing sophisticated parts for a product. In a subsidiary, electronic equipment is used in one department, whilst another section of the business continues to use traditional machinery. You have been asked by your supervisor to allocate or apportion the overheads of the subsidiary business. The following details of the factory specialising in the above parts are as follows: Super Dept (A): is a sophisticated machine shop, equipped with electronically-controlled machinery which cost £30,000. This Dept has 120 square metres of floor area. There are 3 machine operators: the supervisor spends one-quarter of their time in this department. Standard Dept (B): is a 'down graded' part of the factory with machinery costing £10,000. The floor area is 280 square metres. There are two workers who spend all their time in this department: the supervisor spends three-quarters of their time in this department. The overheads to be allocated or apportioned are as follows: 1 2 3 4 5 6 Factory rates £7,200 Wages of the supervisor, £11,200 Factory heating and lighting, £1,400 Depreciation of machinery, €10,000 Buildings insurance, £2,000 Insurance of machinery, £2,500 Required: a) How would you suggest each of these should be allocated or apportioned to each department? b) What, if any other factors you would like to take into account when considering the "basis of apportionment'? Express Co. Ltd is an electronic company, manufacturing sophisticated parts for a product. In a subsidiary, electronic equipment is used in one department, whilst another section of the business continues to use traditional machinery. You have been asked by your supervisor to allocate or apportion the overheads of the subsidiary business. The following details of the factory specialising in the above parts are as follows: Super Dept (A): is a sophisticated machine shop, equipped with electronically-controlled machinery which cost £30,000. This Dept has 120 square metres of floor area. There are 3 machine operators: the supervisor spends one-quarter of their time in this department. Standard Dept (B): is a 'down graded' part of the factory with machinery costing £10,000. The floor area is 280 square metres. There are two workers who spend all their time in this department: the supervisor spends three-quarters of their time in this department. The overheads to be allocated or apportioned are as follows: 1 2 3 4 5 6 Factory rates £7,200 Wages of the supervisor, £11,200 Factory heating and lighting, £1,400 Depreciation of machinery, €10,000 Buildings insurance, £2,000 Insurance of machinery, £2,500 Required: a) How would you suggest each of these should be allocated or apportioned to each department? b) What, if any other factors you would like to take into account when considering the "basis of apportionment'?

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a To allocate or apportion the overheads to each department we need to determine an appropriate basi... View the full answer