Reference no: EM132609838

ABC Company budgets the following amounts for its Service departments:

Stores $50,000

Computer services $85,000

The budget for the Production department is as follows:

Machining $100,000

Assembly $250,000

The Stores and Computer Services departments provide services to the Machining and Assembly departments as well as to each other in the following relationship:

Stores                       20%

Computer Services       60%

Machining                   20%

Assembly                 15%

Stores                       30%

Computer Services     55%

Required:

Question A. Allocate the service departments cost to the production and service department using the reciprocal method.

Question B. Explain the difference between 'Allocation' and 'Apportionment' of overheads