Fast Inc has two production departments (A and B) and two service departments (maintenance and stores). Details of next year's budgeted overheads are shown below.

Total ($)

Central Heating19,200

Direct labour8,000

General Repair costs9,600

Machinery Depreciation54,000

Rent and rates38,400

Canteen9,000

Machinery insurance25,000

Direct Material20,000

Details of each department are as follows.

ABMaintenanceStoresTotal

Floor area (m2)6,0004,0003,0002,00015,000

Machinery book value ($000)48208480

Number of employees50402010120

Allocated overheads ($000)152012552

Service departments' services were used as follows.

ABMaintenanceStoresTotal

Maintenance hours worked5,0004,000----1,00010,000

Number of stores requisitions3,0001,000--------4,000

Required

a) Allocate and apportion production overheads costs amongst the fourdepartments using a suitable basis and reapportion the service department cost to production departments and finds the total overheads of production

departments.

B) In FAST incorporation there are two production departments A and B. Both departments are machine intensive. Department A use 10,000 machine hours and department B uses 12,000 machine hours. Find OAR for department A and B?

Answer rating: 100% (QA)

Fast Inc Overhead Allocation and Reapportionment a Overhead Allocation and Reapportionment Step 1 Allocate Central Costs to Service Departments Cost A... View the full answer