Question

E Ltd comprises of three production departments and two service departments. The following information is provided for E Ltd for 2019: Supervisor's salaries: - Machining: £300,000 - Assembly: £200,000 - Finishing: £250,000 Service department expenses: - Canteen: £120,000 - Maintenance: £150,000 Other expenses: - Factory Rent: £300,000 - Heat and light: £200,000 - General Repairs: £60,000 - Machine Depreciation: £80,000 - Machine insurance: £90,000 - Business Rates: £75,000 Floor space occupied (m2): - Machining: 400 - Assembly: 200 - Finishing: 200 - Canteen: 150 - Maintenance: 50 Value of machinery ('000): - Machining: £300,000 - Assembly: £400,000 - Finishing: £200,000 - Canteen: £50,000 - Maintenance: £50,000 The service departments work for the other departments as follows: - Canteen: - Machining: 30% - Assembly: 30% - Finishing: 40% - Maintenance: - Machining: 25% - Assembly: 50% - Finishing: 25% Required: (a) Using E Ltd overhead analysis sheet for 2019, determine the overhead allocated and apportioned to each of the five departments. (b) Calculate the total overheads included in the production departments after the reapportionment of the service department using the direct method.

          E Ltd comprises of three production departments and two service departments.

The following information is provided for E Ltd for 2019:

Supervisor's salaries:
- Machining: £300,000
- Assembly: £200,000
- Finishing: £250,000

Service department expenses:
- Canteen: £120,000
- Maintenance: £150,000

Other expenses:
- Factory Rent: £300,000
- Heat and light: £200,000
- General Repairs: £60,000
- Machine Depreciation: £80,000
- Machine insurance: £90,000
- Business Rates: £75,000

Floor space occupied (m2):
- Machining: 400
- Assembly: 200
- Finishing: 200
- Canteen: 150
- Maintenance: 50

Value of machinery ('000):
- Machining: £300,000
- Assembly: £400,000
- Finishing: £200,000
- Canteen: £50,000
- Maintenance: £50,000

The service departments work for the other departments as follows:
- Canteen:
  - Machining: 30%
  - Assembly: 30%
  - Finishing: 40%
- Maintenance:
  - Machining: 25%
  - Assembly: 50%
  - Finishing: 25%

Required:

(a) Using E Ltd overhead analysis sheet for 2019, determine the overhead allocated and apportioned to each of the five departments.

(b) Calculate the total overheads included in the production departments after the reapportionment of the service department using the direct method.

Added by Travis S.

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