FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The following business has 5 departments:
Department A, B and C are production units and Cleaning and
Maintenance service units.
• Overheads for Department A is calculated on machine hours
• Service departments costs are allocated sequentially, and Maintenance
department is allocated first.
Cleaning is allocated by floor space
• Maintenance is allocated by machine hours
A
A
Cleaning
Malntenance
Machine
100
250
75
5
10
Hours
Floor Space
200
50
60
150
120
Total
50 000
75 000
25 000
15 000
17 500
Overheads
How much cleaning should be allocated to Department A?
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Transcribed Image Text:The following business has 5 departments: Department A, B and C are production units and Cleaning and Maintenance service units. • Overheads for Department A is calculated on machine hours • Service departments costs are allocated sequentially, and Maintenance department is allocated first. Cleaning is allocated by floor space • Maintenance is allocated by machine hours A A Cleaning Malntenance Machine 100 250 75 5 10 Hours Floor Space 200 50 60 150 120 Total 50 000 75 000 25 000 15 000 17 500 Overheads How much cleaning should be allocated to Department A?
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