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Hello sir,
A manufacturing co runs two production centres C1 and C2 and two service cost centres S1 and S2.The total allocated and apportioned overheads for each is as follows ;
C1 $12000
C2 $17000
S1$9500
S2 $8000It has been estimated that each service cost centre does work for other cost centres in the following proportions:)
Percentage of service cost centre S1 to :
C1 60%
C2 40%
S1 –
S2-Percentage of service cost centre S2 to :
C1 35%
C2 35%
S1 30%
S2-After the reapportionment of service cost centre costs have been carried out ,what is the total overhead for production cost centre C1?
Answer:21940
Could you please help me with the solution
Thank you
You do it in exactly the same way as I show in my lectures on the allocation and apportionment of overheads.
Reallocate S2 first. Then take the new total of S1 and reallocate that.
The total overhead is then the $12,000 already allocated plus the amounts reallocated from S1 and S2.
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