The information below relates to the forthcoming period for a manufacturers'' operation. There are four cost centres for which two are involved in production and two are services.
Required
a. Prepare a schedule in which you apportion the overhead costs to production departments using repeated distribution method or algebraic method. The bases of apportioning canteen and stores overhead cost are number of employees and number of stores requisitions respectively.
b. Calculate production overhead absorption rates for departments A and B using machine hours for department A and direct labour hours for department B.