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A company has four production cost centers: molding, machining, painting and packing. The following information is available:

Cost Centers Floor area (meters) Plant and machinery at cost (Rs.)

Molding Machining 1,000 700 50 40

Painting 500 20

Packaging 300 10

Details of expenditure for the year ended 31st December 2007 are as follows. Rs 50,000 7,000 9,000 6,000 96,000 80,000 40,000 18,000 11,000 9,000 4,000 1,000 45,000 5,000 6,000 2,500 5,500 12,000 18,000 3,000

Direct materials:

Direct Labour:

Indirect Labour:

Molding Machining Painting Packaging Molding Machining Painting Packaging Molding Machining Painting Packaging

Factory rent Repairs and maintenance of factory Factory depreciation Insurance of factory Heating and lighting Depreciation of plant and machinery Maintenance of plant and machinery Insurance of plant Calculate the total cost for each production cost centre.

Solution The overhead apportionment will be as follows:A Costs B Basis allocation C Total Rs. 25,000 D Molding Rs. 11,000 E Machining Rs. 9,000 F Painting 4,000 G Packaging Rs. 1,000

2 Indirect Labour 3 Factory: rent