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Hi Mr. John. Can you please explain how to solve this question. I have been struggling with this question.
A factory consists of two production cost centres (P and Q) and two service cost centres (X and Y). The
total allocated and apportioned overhead for each is as follows:
P Q X Y
$95,000 $82,000 $46,000 $30,000
It has been estimated that each service cost centre does work for the other cost centres in the following
proportions:
P Q X Y
Percentage of service cost centre X to 40 40 – 20
Percentage of service cost centre Y to 30 60 10 –
After the reapportionment of service cost centre costs has been carried out using a method that fully
recognises the reciprocal service arrangements in the factory, what is the total overhead for production
cost centre P?
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