1. Overhead distribution

2. Departmentalization 1 Process of dividing the factory into number of Segments Is called Departmentalization P1 S1 P2P3 S1 Prod Departments Service Dept.

3. Departmentalization 2 Process of allocating and apportioning POHEs to different departments or cost centers (Prod & Service ) P1 S1 P2P3 S1 Prod Departments Service Dept. Factory Overheads

4. Departmentalization P1 S1 P2P3 S1 Prod Departments Service Dept. Factory Overheads Allocation & Apportionment

5. Service Departments Time-Keeping Repair Department Maintenance Department Canteen Purchase Tool Room Boiler House Personnel Department Power House Fire Protection Stores Transport

6. Distribution of Overhead ALLOCATION APPORTIONMENT Specific Costs Common Costs

7. Distribution of Overhead ALLOCATION Specific Costs Allocating whole amount Of an item of POHs to the department for which The expenditure was incurred

8. Distribution of Overhead APPORTIONMENT Common Costs Common costs are apportioned Amongst different departments or cost centers on some basis

9. Principal Basis of Apportionment Of Overheads Floor Area Capital Value Of Assets Number Of Employees Machine Hours Direct Labour Hours Light Points Kilowatt Hours Technical Analysis

10. BASIS FOR APPORTIONMENT Rent, Rates & Taxes, Lighting & Heating Insurance & depreciation of Building, Cost of repairs & maintenance of Building, Air Conditioning Floor Area Occupied Insurance & Depreciation on Plant & Machinery, maintenance of PM, Insurance on building, etc Capital Value

11. BASIS FOR APPORTIONMENT No.Of Employees Repairs & Maintenance of Plant & Machinery Machine Hours Welfare Expenses, time-Keeping,pay-roll Office, Canteen, Recreation, Supervision Medical Expenses

12. BASIS FOR APPORTIONMENT Light Points Or Kilowatt Hours Direct Labour Hrs Work’s Manager’s Remuneration, Salary of Supervisors etc Electricity Charges

13. BASIS FOR APPORTIONMENT Technical Estimate Where not possible to apportion on some Bases Technical estimate is made Horse Power Motive Power Expenses

14. BASIS FOR APPORTIONMENT Store Keeping Expenses Value or Weight of Materials Transport Service Expenses Truck Mileage Tonnage Truck Hours No.Of Pakages

15. PRINCIPLES OF APPORTIONMENT Utility or Service Principle Principle Ability To Pay Survey Method EfficiencyPrinciple

16. PRINCIPLES OF APPORTIONMENT Utility or Service Principle Principle Service or Benefits received By the department

17. PRINCIPLES OF APPORTIONMENT Ability To Pay What the Traffic can bear Basis of Sales or Profit

18. PRINCIPLES OF APPORTIONMENT Survey Method When Difficult to select Basis Production Manager’s Salary (Time spent in Each Dept)

19. PRINCIPLES OF APPORTIONMENT EfficiencyPrinciple Out put as the basis Higher Production Low Overhead Rate Low Production High OH Rate

20. Quick Check Identify the Basis for following Overheads Rent Plant Repairs Power Depreciation of Building Building Repairs Insurance Of Building Fire Insurance of Stock Lighting Expenses Supervision Power ESI Employer’s Cont. to PF Amenities To Staff Canteen Gn. Overheads Floor Area Value of Plant Machine Hours/HP/VM Value Of Building Value Of Building Floor Area Value Of Stock No.Of Light Points No.Of Employees Kilowatt/Value of Plant Direct Wages Direct Wages No.Of Employees/Wages No.Of Employees Direct Wages

21. Summary Of Departmental Overhead Distribution ParticularsBasis Total (Rs) Production Departments A B C D (Rs) (Rs) (Rs) ( Rs) Rent Area(15:11:9:5) 2,000 750 550 450 250 Plant Maintenance Value Of Mch. (4:3:2:1) 1,200 480 360 240 120 Depreciation Value Of Mch. (4:3:2:1) 900 360 270 180 90 Lighting Area(15:11:9:5) 200 75 55 45 25 Insurance Stock Value(5:3:2) 1,000 500 300 200 -- Employer's Cont to PF Wages (4:3:2:1) 300 120 90 60 30 Energy Value Of Mch. (4:3:2:1 ) 1,800 720 540 360 180 Supervision No.Of Emp (6:4:3:2) 3,000 1,200 800 600 400 Total 10,400 4,205 2,965 2,135 1,095

22. Summary Of Departmental Overhead Distribution ParticularsBasis Total (Rs) Production Dept. A B C D (Rs) (Rs) (Rs) ( Rs) SD Rent Area 10,000 3,750 2,750 2,250 1,250 Repairs To Plant Value Of Plant 6,000 2,400 1,800 1,200 600 Depreciation “ 4,500 1,800 1,350 900 450 Lighting Light Points 1,000 375 275 225 125 Supervision No Of Employees 15,000 6,000 4,500 3,000 1,500 Fire Insurance Value Of Stock 5,000 2,500 1,500 1,000 - Power Value Of Plant 9,000 3,600 2,700 1,800 900 ESI Wages 1,500 600 400 300 200 Total 52,000 21,500 15,27510,675 5,025

23. Redistribution of Overheads Reapportionment of Overheads Secondary Distribution Of Overheads

24. Production Departments Service Departments Carry out the central purposes of an organization. Provide support that facilitates the activities of production departments. Service Department Cost Re-Apportionment

25. First, we identify the factor that drives costs in the service department. This cost driver is used as the apportionment base. The Need for Cost Re-Apportionment How are service department costs charged to operating departments?

26. The Need for Cost Apportionment Second, we measure the consumption of the apportionment base in the operating departments.

27. The Need for Cost Apportionment Third, we apportion the service department cost based on the relative amount of the apportionment base used in each operating department.

28. What happens to service department costs after they are apportioned to operating departments? The Need for Cost Apportionment Apportioned service department costs become a part of the overhead in each operating department.

29. The Need for Cost Apportionment First Stage Apportionment Service department costs are apportioned to operating departments. Service Department (Cafeteria) Service Department (Accounting) Service Department (Personnel) Operating Department (Machining) Operating Department (Assembly) The Products

30. The Need for Cost Apportionment Service Department (Cafeteria) Service Department (Accounting) Service Department (Personnel) Operating Department (Machining) Operating Department (Assembly) The Products Second Stage Apportionment Operating department overhead costs and apportioned service department costs are applied to products.

31. Selecting Apportionment Bases Personnel: Number of employees Receiving: Units handled Security: Square footage Power: Kilowatt hours Cafeteria: Number of employees Custodial: Square footage Accounting: Staff hours Criteria Easiest

32. Re- apportionment Basis Purchase Department Stores No of Purchase Orders or value of Materials Purchased for each Production Department Value or Quantity of Materials Issued No. Of Materials Requisitions

33. Re- apportionment Basis Internal Transport inspection Inspection Hrs. Devoted to each Department Weight & Distance

34. Re- apportionment Basis Time Keeping, Security Canteen Welfare Recreation Medical Personnel Pay Roll Number Of Employees Total Labour Hours or Wages or Salaries

35. Re- apportionment Basis Maintenance Department Factory Office No.Of Employees Hrs. Devoted or Worked for Each Department

36. Re- apportionment Basis Building Service Deptt Boiler House % Of Steam Utilized Relative Area Of Each Deptt

37. Interdepartmental Services Problem Re Apportioning costs when service departments provide services to each other Problem Re Apportioning costs when service departments provide services to each other Solutions Direct Method Step method Reciprocal method

38. Direct Method Service Department (Cafeteria) Service Department (Custodial) Operating Department (Machining) Operating Department (Assembly) Interactions between service departments are ignored and all costs are allocated directly to operating departments.

39. Direct Method Example

41. Apportionment base: Number of employees INR 360,000 × 20 20 + 30 = INR 144,000

42. Direct Method Example Apportionment base: Number of employees INR 360,000 × 30 20 + 30 = INR 216,000

43. Direct Method Example INR 90,000 × 25,000 25,000 + 50,000 = INR 30,000 Apportionment base: Square feet occupied

44. Direct Method Example Apportionment base: Square feet occupied 50,000 25,000 + 50,000 INR 90,000 × = INR 60,000

45. Items BasisTotal (Rs.) Production DepartmentService Department P1P1 P2P2 P3P3 OfficeWorksho p Indirect wages Indirect materials General overhead Amenities to staff Employer’s contribution to E.S.I. Power Depreciation Apportionment of workshop overhead Apportionment of office overhead Actual Direct wages (4:5:6) No.of employees (6:5:6:3:5) Direct Wages (4:5:6) H.P. of machine X Machine hours worked (6:16:15:1) 15% of value of machinery Machine hours (2:4:3) Direct wages (4:5:6) 25,000 10,950 1,500 12,500 1,200 3,800 15,750 3,000 2,000 400 3,000 320 600 4,500 3,000 500 2,500 400 1,600 5,250 4,000 3,000 600 3,000 480 1,500 3,750 10,000 1,100 - 1,500 - - - 5,000 1,850 - 2,500 - 100 2,250 70,70013,820 2,600 3,360 16,250 5,200 4,200 16,330 3,900 5,040 12,600 - (-12,600 11,700 (-) 11,700 - Allocated overhead Total19,78025,65025,270- - Overhead Analysis Sheet

46. Bharat Engineering Works Departmental Overhead Distribution Statement (For 12 Months) Particulars of Expenses Basis of Distribution Total Rs. Production Deptts.Service Dept. ABCS Rent Power Indirect wages Depreciation of machinery Electricity Canteen expenses Direct wages Floor space (30:25:45:20) H.P. of machine (65:30:30:40) Direct Wages (12:14:18:8) Value of machine (50:60:80:10) Light points (7:7:9:5) No. of workers (2:3:6:2) Actual 36,000 8,250 5,200 22,000 5,600 6,500 8,000 9,000 3,250 1,200 5,500 1,400 1,000 --- 7,500 1,500 1,400 6,600 1,400 1,500 --- 13,500 1,500 1,800 8,800 1,800 3,000 --- 6,000 2,000 800 1,100 1,000 8,000 91,55021,350 +5,970 19,900 +3,980 30,400 +9,950 19,900 -19,900 Re-distribution of expenses of service department to the production departments on the basis of service rendered 30%: 20%:50% Allocated overhead total (A) Effective labour hours (see workings) (No. of worker x working hours) (B) 27,32023,88040,350Nil 3,2004,8009,600 Labour hour rate (A ÷ B)8.53754.9754.203

47. Operating Department (Machining) Operating Department (Assembly) Step Method Once a service department’s costs are apportioned, other service department costs are not allocated back to it. Service Department (Cafeteria) Service Department (Custodial)

48. Step Method Service Department (Cafeteria) Service Department (Custodial) Operating Department (Machining) Operating Department (Assembly) Custodial will have a new total to Apportion to operating departments; its own costs plus those costs allocated from the cafeteria.

49. Step Method 1Identify the SD which renders service to larger No’s of other Deptts 2 Distribute its Costs to other Deptts, Including service Department 3 Identify the next service Department. Which renders service to the next largest No’s 4 Continue the process till Amount is Exhausted 5 If all SD renders service to = No of Departments. Than cost of SD with largest amount be taken first

50. Step Method Example We will use the same data used in the direct method example.

51. Step Method Example Apportion Cafeteria costs first since it provides more service than Custodial.

52. Step Method Example INR 360,000 × 10 10 + 20 + 30 = INR 60,000 Apportionment base: Number of employees

53. Step Method Example INR 360,000 × 20 10 + 20 + 30 = INR 120,000 Apportionment base: Number of employees

54. Step Method Example INR 360,000 × 30 10 + 20 + 30 = INR 180,000 Apportionment base: Number of employees

55. Step Method Example New total = INR 90,000 original custodial cost plus INR 60,000 apportioned from the cafeteria.

56. Step Method Example INR 150,000 × 25,000 25,000 + 50,000 = INR 50,000 Apportionment base: Square feet occupied

57. Step Method Example INR 150,000 × 50,000 25,000 + 50,000 = INR 100,000 Apportionment base: Square feet occupied

58. Comparison of Methods

59. SECONDARY OVERHEAD DISTRIBUTION SUMMARY ParticularsTotal Rs. BaseService Departments (Rs.)Production Departments PQRSXYZ Factory overhead Add : Service Dept.costs P Q R S 5,95,000 0 Given No. of Employees (50:40:50: 100:125:85) DLHs Rs.80,000 in (6:3:4:3:4) Area (Rs.1,33,000 in (10:30:15: 15) DLHs (Rs.66,000 in 4:3:4) 45,000 -45,000 75,000 5,000 -80,000 1,05,000 4,000 24,000 -1,33,000 30,000 5,000 12,000 19,000 -66,000 1,93,000 10,000 16,000 57,000 24,000 64,000 12,500 12,000 28,500 18,000 83,000 8,500 16,000 28,500 24,000 Total OHEs of prod.depts 5,95,0003,00,0001,35,0001,60,000

60. Reciprocal Services Method Interdepartmental services are given full recognition rather than partial recognition as with the step method. Service Department (Cafeteria) Service Department (Custodial) Operating Department (Machining) Operating Department (Assembly) Because of its mathematical complexity, the reciprocal method is rarely used.

61. Reciprocal Services Methods Trial & Error Method Repeated Distribution Method Algebraic Simultaneous Equation Method

62. Reciprocal Services Methods Trial & Error Method Cost Of one Service Dept (Say A ) is apportioned To another Service Dept (Say B) based on service rendered The cost of another dept (B) plus its share In the cost of first service department (A) Is again apportioned to first service department The amount so apportioned to A will again be apportioned to the service department B The process continues till amount becomes negligible

63. Service Departments (Rs) X Y Calculation Of Total Costs Of Service Departments Total Exp as per Primary Distribution 23,400 30,000 Charge 10% 0f Rs 23,400 (X) to Y 2,340 20% of Rs.32,340 (Y) to X 6,468 10% of Rs.6,468 (X) to Y 647 20% of Rs.647 (Y) to X 129 10% of Rs.129 (X) to Y 13 20% of Rs.12 (Y) to X 3 (Since Rs.3 to be apportioned is very small distribution process is stopped ) 30,000 33,000 Total

64. Secondary Overhead Distribution Summary Particulars Production Departments (Rs.) Total Rs. ABC Total expenses as per primary overhead distribution summary Add Service Dept. Costs : X : Rs.30,000 at 20%, 40% & 30% to A,B, and C Y : Rs.33,000 at 40%, 20% & 20% to A, B & C 80,000 6,000 13,200 70,000 12,000 6,600 50,000 9,000 6,600 2,00,000 27,000 26,400 Total99,20088,60065,6002,53,400

65. Reciprocal Services Methods Repeated Distribution Method 1 Distribute the cost of a service Dept. to the Production and service department Using the percentage 2 Apportion the cost of 2 nd service department (Aggregate) to production and other service department as per % given 3 Use the same procedure with other service departments till the cost of service departments become negligible

66. Question A factory is having 3 prod. Departments A,B & C, and 2 service Departments Boiler House and Pump Room. The boiler house was to depend upon the pump Room for supply of water and in turn, depends upon the boiler house for supply of steam power for driving the pump The expenses incurred by the production department during the period are: A Rs 8,00,000,B Rs 7,00,000 And C Rs 5,00,000.The expenses of Boiler house are Rs 2,34,000 and the Pump House Rs 3,00,000.The expenses of Boiler House and Pump house are Apportioned to the prod. departments on the following basis A B C BH PR Expenses Of Boiler House 20% 40% 30% - 10% Expenses Of Pump Room 40% 20% 20% 20% -

67. Particulars Total Rs Basis Prod Departments (Rs) Service Dept (Rs) A B C Boiler Pump P Distribution 25,34,000 given 8,00,000 7,00,000 5,00,000 2,34,000 3,00,000 Add Service Dept. Costs Boiler House 0 20:40:30:10 46,000 93,600 70,200 -2,34,000 23,400 Pump Room 0 40:20:20:20 1,29,360 64,680 6 4,680 64,680 -3,23,400 Boiler House 0 20:40:30:10 12,936 5,872 19,404 -64,680 6,468 Pump Room 0 40:20:20:20 2,587 1,294 1,294 1,293 -6,468 Boiler House 0 20::40:30:20 259 517 388 -1293 129 Pump House 0 40:20:30:20 52 26 26 25 -129 Boiler House 0 20:40:20:20 5 10 8 -25 2 Pump House 0 40:20:20:20 1 1 0 0 -2 Total 25,34,000 9,92,000 8,86,000 6,56,000 0 0 Secondary Overhead Distribution Summary

68. Reciprocal Services Methods Algebraic Simultaneous Equation Method Total Costs of Service Departments are Expressed in algebraic equation Equations are developed on the basis of Primary distribution & % of service rendered to each other Total Costs of Service Departments can Be calculated by solving EQUATIONS

69. Algebraic Equation X= OHE’s + % of Y Y= OHE’s + % of X Service Department OHE’S can be apportioned M N P R S R 20% 30% 40% - 10% S 30% 40% 10% 20% -

70. Quick Check Data Allocation bases: Business school administration costs (ADMIN): Number of employees Business administration computer services (BACS): Number of personal computers The direct method of Apportionment is used.

71. Quick Check How much cost will be apportioned from Administration to Accounting? a. INR 36,000 b. INR144,000 c. INR180,000 d. INR 27,000 How much cost will be apportioned from Administration to Accounting? a. INR 36,000 b. INR144,000 c. INR180,000 d. INR 27,000

72. How much cost will be apportioned from Administration to Accounting? a. INR 36,000 b. INR144,000 c. INR180,000 d. INR 27,000 How much cost will be apportioned from Administration to Accounting? a. INR 36,000 b. INR144,000 c. INR180,000 d. INR 27,000 Quick Check INR180,000X 20 20 + 80 = INR 36,000

73. Quick Check How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 52,500 b. INR135,000 c. INR 270,000 d. INR 49,500 How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 52,500 b. INR135,000 c. INR 270,000 d. INR 49,500

74. Quick Check How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 52,500 b. INR 135,000 c. INR 270,000 d. INR 49,500 How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 52,500 b. INR 135,000 c. INR 270,000 d. INR 49,500 INR 90,000 × 18 18 + 102 = INR 13,500

75. Quick Check Data Apportionment bases: Business school administration costs (ADMIN): Number of employees Business administration computer services (BACS): Number of personal computers The step method of apportionment is used.

76. Quick Check How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 35,250 b. INR 49,072 c. INR 18,000 d. INR 26,333 How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 35,250 b. INR 49,072 c. INR 18,000 d. INR 26,333

77. Quick Check How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 35,250 b. INR 49,072 c. INR 18,000 d. INR 26,333 How much total cost will be apportioned from ADMIN and BACS combined to the Accounting Department? a. INR 35,250 b. INR 49,072 c. INR 18,000 d. INR 26,333

78. Overhead Appropriation Few Questions

79. 4. SECONDARY DISTRIBUTION SUMMARY Cost of service department Basis of apportionment Total Rs. Production Department P1P2P3 primary distribution Canteen Power house (light) Power house (power) Stores Time keeping & accounts Repair shop --- No. of employee (6:5:4) No. of light points (3:4:5) House Power (3:2:3) No. of requisitions (4:3:5) No. of employee (6:5:4) Value of assets (2:3:4) 63,000 1,500 1,200 4,000 3,600 3,000 4,500 20,000 600 300 1,500 1,200 1,000 18,000 500 400 1,000 900 1,000 1,500 25,000 400 500 1,500 800 2,000 Allocated overhead Total80,80025,80023,30031,700

80. ItemsBasisTotal (Rs.) Production DepartmentService Department P1P1 P2P2 P3P3 OfficeWorkshop Indirect wages Indirect materials General overhead Amenities to staff Employer’s contribution to E.S.I. Power Depreciation Apportionment of workshop overhead Apportionment of office overhead Actual Direct wages (4:5:6) No.of employees (6:5:6:3:5) Direct Wages (4:5:6) H.P. of machine X Machine hours worked (6:16:15:1) 15% of value of machinery Machine hours (2:4:3) Direct wages (4:5:6) 25,000 10,950 1,500 12,500 1,200 3,800 15,750 3,000 2,000 400 3,000 320 600 4,500 3,000 500 2,500 400 1,600 5,250 4,000 3,000 600 3,000 480 1,500 3,750 10,000 1,100 - 1,500 - - - 5,000 1,850 - 2,500 - 100 2,250 70,70013,820 2,600 3,360 16,250 5,200 4,200 16,330 3,900 5,040 12,600 - (-) 12,600 11,700 (-) 11,700 - Allocated overhead Total19,78025,65025,270- - 1. Overhead Analysis Sheet

81. 2. OVERHEAD ANALYSIS SHEET Items BasisTotal (Rs.) Production Deptt.(Rs) Service Deptt( Rs). P1P1 P2P2 P3P3 S1S1 S2S2 Rent and rates General lighting Indirect wages Power Depreciation Direct wages Indirect materials Apportionment of Service Departments Overhead S 1 S 2 Floor space (4:5:6:4:1) Light points (2:3:4:2:1) Direct wages (600:400:600:300:39) H.P. of Machine (6:5:5:1) Value of machines (12:16:20:1:1) Actual Direct wages (3:2:3) Given (2:3:5) Total (A) Working hours (B) 5,000 600 1,939 1,500 10,000 1,695 966 1,000 100 600 2,400 - 300 1,250 150 400 300 3,200 - 200 1,500 200 600 500 4,000 - 200 1,000 100 300 100 200 1,500 - 250 50 39 - 200 195 266 21,7005,000 1,200 200 5,500 800 300 7,000 1,200 500 3,200 (-) 3,200 - 1,000 - (-) 1,000 21,7006,400 2,560 6,600 3,000 8,700 1,500 Nil Overhead rate per working hour [(A) ÷(B)]2.502.205.80

82. COST OF PRODUCT – X Direct material Direct Labour Prime Cost Factory Overhead : P 1 : 4 x 2.50 P 2 : 5 x 2.20 P 3 : 3 x 5.80 Cost of Product X 10.00 11.00 17.40 50.00 30.00 80.00 38.40 118.40 ( Rs)

83. 3. SECONDARY OVERHEAD DISTRIBUTION SUMMARY ParticularsTotal Rs. BaseService Departments (Rs.)Production Departments PQRSXYZ Factory overhead Add : Service Dept.costs P Q R S 5,95,000 0 Given No. of Employees (50:40:50: 100:125:85) DLHs Rs.80,000 in (6:3:4:3:4) Area (Rs.1,33,000 in (10:30:15: 15) DLHs (Rs.66,000 in 4:3:4) 45,000 -45,000 75,000 5,000 -80,000 1,05,000 4,000 24,000 -1,33,000 30,000 5,000 12,000 19,000 -66,000 1,93,000 10,000 16,000 57,000 24,000 64,000 12,500 12,000 28,500 18,000 83,000 8,500 16,000 28,500 24,000 Total OHEs of prod.depts 5,95,0003,00,0001,35,0001,60,000

84. 5. OVERHEAD DISTRIBUTION STATEMENT Particulars of Expenses Basis of Apportionment Total Rs.Production Deptts.Service Deptts. XYAB Depreciation Rent, Rates & Taxes Power Ins.on assets Canteen exp. Electricity Direct wages Direct material Assets value (10:5:3:1) Floor space (5:4:1:2) H.P. of machine (10:5:4:1) Assets value (10:5:3:1) No. of workers (100:50:50:25) Light points (25:15;10:10) Actual 38,000 18,000 12,500 9,500 5,400 3,600 8,000 4,000 20,000 7,500 6,250 5,000 2,400 1,500 --- 10,000 6,000 3,125 2,500 1,200 900 --- 6,000 1,500 2,500 1,500 1,200 600 5,000 4,000 2,000 3,000 625 500 600 3000 --- 99,00042,650 +11,150 23,725 +7,433 22,300 -22,300 10,325 +3,717 Re-distribution of expenses of Deptt. A among X, Y and B in ratio 3:2:1 Re-distribution of expenses of Dept. B between X and Y equally 53,800 +7,021 31,158 +7,021 Nil --- 14,042 -14,042 Allocated overhead60,82138,179Nil

85. 7. STATEMENT SHOWING OVERHEAD EXPENSES OF PRODUCTION DEPARTMENTS A AND B Particulars of Expenses Basis of Apportionment Total Rs.Production Deptts.Service Deptts. ABCD Direct material Direct labour Depreciation Rent,Rates & Tax Insurance Power Canteen exp. Electricity Actual Value of Assets (10:5:3:1) Floor space (5:4:1:2) Value of Assets (10:5:3:1) H.P. of machine (10:5:4:1) No. of workers (100:50:50:25) Light points (25:15;10:10) 5,000 15,000 95,000 18,000 7,600 10,000 5,400 2,400 --- 50,000 7,500 4,000 5,000 2,400 1,000 --- 25,000 6,000 2,000 2,500 1,200 600 3,000 10,000 15,000 1,500 1,200 2,000 1,200 400 2,000 5,000 3,000 400 500 600 400 1,58,40069,90037,30034,30016,900 Re-distribution of expenses of service department ‘C’ Rs. 12,000 to D and balance of Rs. 22,300 to A:B= 3:2 Re-distribution of expenses of service Department “D” to A:B = 9:1 +13,380+8,920(-) 34,300+12,000 83,280 26,010 46,220 2,890 Nil --- 28,900 (-)28,900 Allocated overhead total1,09,29049,110Nil

86. thanks

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