calculate the overhead rate per rate of direct labour hour of production departments 559035

A company has two production departments and two service departments. The following data relates to a particular period:

Particulars

Production departments

Service departments

P1

P2

Direct material (Rs)

40.000

20,000

5,000

10,000

Direct wages (Rs)

47.5•0

25,000

101000

5,000

Overheads (Rs)

40,000

25,000

151000

10,000

Power requirement at normal capacity operations (KWH)

20,000

35,000

12,500

17,500

Actual power consumption during the period (KWH)

13,000

23,000

10,250

10,000

The power requirements of these departments are met by a power generation plant. The said plant incurred an expenditure, which is not included in the aforementioned information, of Rs 1,21,875 out of which a sum of Rs 84,375 was variable and the rest fixed. After apportionment of power generation plant costs to the four departments, the service department overheads must be redistributed on the following bases:

Department

P1

P2

S1

S2

S1

50%

40%

10%

S2

60%

20%

20%

You are required to perform the following:

Apportion the power generation plant costs to the four departments.

Re apportion the costs of service departments to production departments.

Calculate the overhead rate per rate of direct labour hour of production departments, given that the direct wages rates of P1 and P2 are Rs 5 and Rs 4 per hour, respectively.

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