Page 474 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 474
Chapter 18
Example 4
A manufacturing company has two production cost centres (P1 and P2) and
two service cost centres (S1 and S2). The following shows the work done by
the two service cost centres:
P1 P2 S1 S2
Work done by S1 55% 35% 10%
Work done by S2 30% 65% 5%
After the initial allocation and apportionment of overheads, the totals for each
cost centre were:
P1 P2 S1 S2
$ $ $ $
Overhead cost 150,000 205,000 21,000 15,000
The reapportionment of the service cost centres is shown below:
P1 P2 S1 S2
$ $ $ $
Overhead cost 150,000 205,000 21,000 15,000
Re-apportion S1 11,550 7,350 (21,000) 2,100
Re-apportion S2 5,130 11,115 855 (17,100)
Re-apportion S1 470 299 (855) 86
Re-apportion S2 26 56 4 (86)
Re-apportion S1 3 1 (4) 0
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Total overhead 167,179 223,821 0 0
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