Calculate the primary allocation of overheads per department

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Reference no: EM132611175

City Leaving is the name of Hotel in Bloemfontein. CLH is a hotel of high standard in the country and provides you with the following information for the period ending 31 March 2020.

The following additional information is available:

                                                      Department W                     Department X                            Service Y                Service Z

Number of employees                          220                                190                               110                       70

Floor space                                        1 800 m2                        2 100 m2                    1 900 m2                    830 m2

Value of machinery                                R620 000                        R400 000                      R380 000                 R200 000

Material usage                                       780                                     600                          500                      250

Machine hours                                       700                                   500                            370                       130

The budgeted manufacturing overheads for 2020 are as follows:

Building insurance                        ??????R270 000

Cafeteria                                     ????????R81 000

Inventory piling                            ???????R200 000

Maintenance of equipment             ?????R50 000

Indirect material:?W                       ??????R35 000

???X    ??????R70 000

???Y   ??????R40 000

???Z   ??????R26 000

Required:

Question 1: Calculate the primary allocation of overheads per department as well as the secondary allocation per production department. The number of employees is used as a basis for the service Z department and the material usage for the service Y department. ?

Question 2: Calculate the departmental MOH rate. MOH are allocated on the basis of machine hours in both production departments.

Reference no: EM132611175

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