Ellard limited manufactures and sell box files. Ellard ltd has five (5) departments, two production...
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Accounting
Ellard limited manufactures and sell box files. Ellard ltd has five (5) departments, two production and three service departments. The books of Ellard ltd shows the following total overheads for the five departments after apportionment were as follow:
BWP
Production departments
Production Department X
41,580
Production Department Y
56,890
Service Departments
Stores Departments
15,902
Maintenance Departments
7,486
Canteen departments
23,540
The following additional information has also been provided:
Production Department X
Production Department Y
Stores Departments
Maintenance Departments
Canteen departments
Number of employees
30
40
20
10
20
Hours of maintenance
350
150
300
200
0
Area Occupied
450
175
90
50
25
Machinery value (BWP'000)
250
165
90
100
0
Number of requestions
480
420
Machine hours
7,500
1,100
Direct labour hours
4,600
5,900
Required:
Using the above information, you are re-apportioning of the fixed overheads from service department to both service and production departments (where applicable), using the most appropriate basis. (Use the stepdown method)
Answer & Explanation
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