Question $4(22$ marks$)$

Helm Ltd$.$ has two production departments and two service department and presented the

following data for the period ending $30$ June $2020.$ The production departments are forming and

assembly and the service departments are maintenance and stores.

The following budgeted overheads and budgeted activity levels have been provided:

It has been estimated that service department usage is as follows:

Actual overheads and activity levels in the production departments were as follows:

Required:

$($a$)$ Use the simultaneous equation method to derive the re$-$allocated overheads to production

departments and derive the overhead absorption rates for these departments.

$($b$)$ Calculate the over$/$under absorption of overheads in each department.

$($c$)$ Explain the terms 'overhead allocation' and 'overhead apportionment'.