Reference no: EM132596355
Maridadi Manufacturing Company has four departments P, Q, R and S. S is a service department while the other three are production departments. For the year ended 31st March, the following overhead costs were incurred.
Overheads Kshs.
Rent 100,000
Repairs to plant 32,000
Depreciation of plant 36,000
Light and heat 9,600
Supervision 96,000
Fire insurance 10,000
Employer's liability insurance 8,000
Information in respect of four departments as follows:
Dep: P Dep: Q Dep: R Dep: S
Areas square metres 3,800 1,200 2,200 800
Number of employees 40 30 20 10
Total wages Kshs.216,000 Kshs.144,000 Kshs.96,000 Kshs.48,000
Value of stock Kshs.480,000 Kshs.240,000 Kshs.120,000 Kshs.60,000
Value of plant Kshs.840,000 Kshs.600,000 Kshs.360,000 Kshs.120,000
Required:
Question 1: Apportion the overhead costs to the various departments on the most equitable basis
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