- This topic has 1 reply, 2 voices, and was last updated 5 months ago by
John Moffat.
John Moffat.-
Posts
-
sarbrina
- Topics: 21
- Replies: 48
- ☆☆
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?
John Moffat
- Topics: 57
- Replies: 49621
- ☆☆☆☆☆
X and Y are service departments and need reapportioning to the production centres P and Q.
You can either use the step-down method of the algebraic method (both give the same answer) and I explain how to do both methods in my free lectures on overheads.
sarbrina
John Moffat- You must be logged in to reply to this topic.