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.