A company has 2 production cost centres (A and B) and 2 service cost centres (maintenance and stores).
Expected overheads for the next year are shown below.
Heat and Light
£19,200
Repair costs
£9,600
Machinery depreciation
Rent and rates
£54,000
£38,400
Canteen
£9,000
Machinery insurance
£25,000
Details of each department are as follows:
A
Floor area (m²)
B Maintenance Stores TOTAL
6000 4000
3000
2000 15000
Machinery book value (£000) 48 20
Number of employees
8
25 20
10
Allocated overheads (£000) 15 20
12
Maintenance hours worked 5000 4000
Stores requisitions
3000 1000
processed
Labour hours
45000 36000
1000
4
5
80
60
5
50
1000
10000
5000