Reference no: EM132757160

Question: The Operations Manager of Wyndalco provided the following budgeted information for three production departments (A, B and C) and two service departments (Stores and Maintenance). The following data below are the budgeted data for the same period:

A B C Maintenance Stores

Indirect Labour $1,265,625 $632,813 $1,054,688 $337,500 $421,875

Indirect Materials $253,125 $210,938 $632,813 $506,250 $590,625

Other Expenses 675,000 $843,750 $421,875 $168,750 $675,000

Labour hours $131,250 $67,500 $168,750

Machine hours $ 84,375 $126,563 $210,938

Below are the actual overhead and actual activities for the three (3) production departments at General's Ltd for the year ended August 2018.

A B C

Indirect Labour $1,265,625 $168,750 $253,125

Indirect Materials $421,875 $253,125 $590,625

Other Expenses $843,750 $1,265,625 $1,054,688

Labour hours $171,875 $84,375 $210,938

Machine hours $84,375 $168,750 $253,125

Overhead is absorbed based on how intensive the individual departments are considered. It has been estimated that service department usage is as follows:

A B C Maintenance Stores

Maintenance 20% 40% 25% - 15%

Stores 50% 35% 10% 5% -

Required: a. How do I prepare a schedule to apportion the notional service cost to production and the total overheads for the production departments after apportionment. Hint: use simultaneous equations to derive the notional values.

b. Calculate the overhead absorbed in each department.

c. Calculate the under/over absorbed overheads for each department.