Tutorial Question Overheads 2.

(a) The Kaza Works Ltd. operates three (3) production departments; Machine, Assembly and
Finishing, and two (2) service departments, Stores and Canteen. Overheads costs have been
budgeted as follows for the coming year:

Costs Allocated Total Machine Assembly Finishing Stores Canteen

Indirect labour 92,000 40,000 24,000 12,000 7,000

9,000

Unallocated overhead costs are as follows:

Budgeted Overheads Pula

Supervision 46,800
Rents and Rates 128,000
Power 144,000
Machine depreciation 57,600
Heat and Light 83,200

The details of the departments are available as follows:

Details Machine Assembly Finishing Stores Canteen

Floor Area Occupied (sqm) 3,000 1,800 600 400 600
Machine Value (P’000) 24 10 8 2 4
No. of Employees 20 15 15 10 5
Kilo-Watt 1,000 800 200 400 100
Direct Labour Hours Budgeted 3,600 2,000 1,200 - -
Machine Hours 3,200 1,700 1,500

The following are the proportions of service rendering by the service departments:

Machine Assembly Finishing Stores Canteen

Stores Costs Apportioned 20% 30% 40% - 10%
Canteen Costs Apportioned 40% 25% 20% 15% -

Required:

(i) Prepare an overhead analysis sheet showing apportionment of overhead costs.

Use the Repeated Distribution Method to carry out the re-apportionment.