Answer to Question #274965 in Economics for jay

Question

In Bennett’s Ltd three types of jobs are performed in separate production departments E, F, and G. In addition, there are two service departments A and B. indirect labour costs and other indirect expenses for Bennett’s Ltd, have been allocated to departments as follows:

Production departments Service departments

                   E      F     G

Indirect labour    5000 7000   9000

Other indirect exp. 2000  4000  6000

                 7000 11000 15000                    A        B

 Indirect labour   2000     3000 

Other indirect exp. 3000     4000

                 5000     7000

The expenses of the service departments are to be allocated between other departments as follows:

Dept. A to Depts. E 30%; F 25%; G 35%; B 10%

Dept. B to Depts. E 35%; F 29%; G 36%

In departments E and F the job costing is to use an overhead rate per direct labour, while in G an overhead rate per machine hour rate is used. The number of direct hours and machine hours per department is expected to be:

        

Answer 1

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