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 other cost centres in the following proportions:
P Q X Y
Percentage of service cost centre X to 50 50 – –
Percentage of service cost centre Y to 30 60 10 –
The reapportionment of service cost centre costs to other cost centres fully reflects the above proportions.
After the reapportionment of service cost centre costs has been carried out, what is the total overhead for
production cost centre P?
This is the solution given
Direct cost $95,000
Proportion of cost centre X (46,000 + (0·10*30,000))*0·50 $24,500
Proportion of cost centre Y (30,000*0·3) $9,000
Total overhead cost for P $128,500
My question is where did the 0.10 came from. I do not understand why that was used. Please explain
ACCA Forums
MAF2 pilot paper Question 44
I should say the 0.10 used in the workings in the apportionment for centre X.
slam bro because as u see Percentage of service cost centre Y to all is 30 60 10 – as we see 10 is there for X that 10 is going 2 x so we r calculating that 10 apportioned overhead hope so this will make sense to you take care.
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