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Indirect labour dep A 40000
Indirect labour department B 32000
Rent and rates total
88,000Administrative costs (total) 60000
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TOTAL 220000Administrative costs are to be shared equaly by departments A and B Other information is as follows
FLOOR AREA 12000 DEP A 8000 DEP BNumber of employees 160 DEP A 40 DEP B
What is the total overhead cost of department A?
$82.800
$140 800
$122.800
Hello sir ,
Could you please explain the ans i m unable to get the ans shouldn’t the rent and rates be allocated and apportioned based on floor area ,
Ur help and explanation would be really helpfulThe rent and rates should be apportioned on the floor area and therefore the amount apportioned to department A is 12/20 x 88,000 = $52,800.
So the total for department A is 40,000 + 52,800 + (1/2 x 60,000)
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