The following overheads were incurred for the year ended 30th June 2020.
GHS
   Cleaning costs                      70,000
   Salaries                               80,000
   Social security                      6,000
   Tooling                               9,400
   Machine repairs                   25,400
   Power                                   22,000
   Insurance of machinery         3,000
   Insurance of building              15,000
   Depreciation                           20,000
   Rent & Rates                               42,000
The following additional information is made available
   Departments A B     C   D
   Floor space 1500       1300 800    1400
   Kilowatts (hours) 200       800 80 70
   Supervisors   30 20 70 10
   Cost of machines 3000       2000 8000 1600
   Total employees 180       200 120 140
   Machine maintenance (hours)       30       20 10 6
   Tool costs 3200       4000       1300 900
   Cleaning costs               20000       21000       15000       14000
Departments C and D are service departments and are interdependent as follows
C   D
Departments   A                   45       35
B 40 45
C                   -       20
D                   15       -

Required:
(a)   Apportion the overheads among the departments.
(b)   Recover the costs of the service departments into the production costs using the mathematical approach

Answer rating: 100% (QA)

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