01. XL Ltd., has three production departments and four service departments.

The expenses for these departments as per

Primary Distribution Summary are as follows:
Production Departments: (Rs.) (Rs.)
A 30,000
B 26,000
C 24,000 80,000
Service Departments: (Rs.) (Rs.)
Stores 4,000
Time-keeping and Accounts 3,000
Power 1,600
Canteen 1,000 9,600
The following information is also available in respect of the production departments:
Dept. A Dept. B Dept. C
Horse power of Machine 300 300 200
Number of workers 20 15 15
Value of stores requisition in (Rs. ) 2,500 1,500 1,000
Apportion the costs of service departments over the production departments.

Solution
Ratios: A B C
HP of Machines

No. of Workers

Value of stores req.

Statement Showing Secondary Distribution

Particulars Bases Production Dept Service Dept.
A B C Stores Time Keep Power Canteen
OHS. As given 30000 26000 24000 4000 3000 1600 1000
Dist. Stores OHS
Dist. Time Keep ohs
Dist. Power ohs
Dist. Canteen ohs
30000 26000 24000
ese departments as per
02. Suppose the expenses of two production departments A and B and two service
departments X and Y are as under:
Amount(Rs.) Apportionment Basis
Y A B
X 2,000 25% 40% 35%
Y 1,500 — 40% 60%
A 3,000
B 3,200

Statement Showing Secondary Distribution

Particulars Production Dept Service Dept.
A B X Y
Ohs as given 3000 3200 2000 1500
Dist of X dept. Ohs
Dist of Y dept. Ohs
3000 3200
 Sanz Ltd., is a manufacturing company having three production departments, ‘A’, ‘B’ and ‘C’and two service departments ‘X’ a
December 2013:
Total A B C X Y
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Directmaterial 1,000 2,000 4,000 2,000 1,000
Directwages 5,000 2,000 8,000 1,000 2,000
Factoryrent 4,000
Power 2,500
Depreciation 1,000
Otheroverheads 9,000
Additionalinformation:
Area(Sq.ft.) 500 250 500 250 500
Capital value of assets(Rs.lacs) 20 40 20 10 10
Machinehours 1,000 2,000 4,000 1,000 1,000
Horse powerofmachines 50 40 20 15 25
A technical assessment of the apportionment of expenses of service departments is as under:
A B C X Y
Service Dept. ‘X’ (%) 45 15 30 – 10
Service Dept. ‘Y’ (%) 60 35 – 5 –
Required:
(i) A statement showing distribution of overheads to various departments.
(ii) A statement showing re-distribution of service departments expenses to production departments using Trial and error met

Statement Showing Primary Distribution

Production Dept. Service Dept.
Particulars Total Bases A B C X Y
Direct Materials 3000 2000 1000
Direct Wages 3000 1000 2000
Rent 4000 2:1:2:1:2 1000 500 1000 500 1000
Power 2500 10:8:4:3:5 833 667 333 250 417
Depreciation 1000 2:4:2:1:1 200 400 200 100 100
Other Overheads 9000 1:2:4:1:1 1000 2000 4000 1000 1000
22500 3033 3567 5533 4850 5517

Redistribution of Service Dept. expenses

Service Dept.
X Y
Overheads as per Primary Distribution 4850 5517
Dist. Of X to Y 485
Dist. Of Y to X 300
Dist. Of X to Y 30
Dist. Of Y to X 2
5152 6032
 Statement Showing Secondary Distribution
Production Dept.
Particulars A B C
Overheads as per Primary Dist. 3033 3567 5533
Dist Of X to Prod. Dept 2318 773 1546
Dist Of Y to Prod. Dept 3619 2111
8971 6451 7079
nd two service departments ‘X’ and ‘Y’. The following is the budget for

tments using Trial and error method.

n
on
ABC Ltd. has three production departments P1, P2 and P3 and two service departments S1 and S2. The following data are
Company for the month of October, 2013:
(Rs.)
Rent and rates 62,500
General lighting 7,500
Indirect Wages 18,750
Power 25,000
Depreciation on machinery 50,000
Insurance of machinery 20,000
Other Information:
P1 P2 P3 S1 S2
Direct wages (Rs.) 37,500 25,000 37,500 18,750 6,250
Horse Power of Machines 60 30 50 10 -
Cost of machinery (Rs.) 3,00,000 4,00,000 5,00,000 25,000 25,000
Floor space (Sq. ft) 2,000 2,500 3,000 2,000 500
Number of light points 10 15 20 10 5

Expenses of the service departments S1 and S2 are reapportioned as below:

P1 P2 P3 S1 S2
S1 (in %) 20 30 40 -- 10
S2 (in %) 40 20 30 10 --

Statement Showing Primary and Secondary Distribution

Production Dept. Service Dept.
Particulars Total Bases P1 P2 P3 S1 S2
Direct Wages 25000 18750 6250
Rent and rates 62500 4:5:6:4:1 12500 15625 18750 12500 3125
General lighting 7500 2:3:4:2:1 1250 1875 2500 1250 625
Indirect Wages 18750 6:4:6:3:1 5625 3750 5625 2812 938
Power 25000 6:3:5:1:- 10000 5000 8333 1667
Depreciation on mach 50000 12:16:20:1:1 12000 16000 20000 1000 1000
Insurance of machinery 20000 12:16:20:1:1 4800 6400 8000 400 400
208750 46175 48650 63208 38379 12338
Dist. Of S1 Dept 7676 11514 15351 3838
Dist. Of S2 Dept 6470 3235 4853 1618
Dist. Of S1 Dept 324 485 647 162
Dist. Of S2 Dept 65 32 49 16
Dist. Of S1 Dept 3 5 6 2
Dist. Of S2 Dept 1 NIL 1
60713 63921 84116
. The following data are extracted from the records of the

S1 (in %) 20 30 40 -- 10
S2 (in %) 40 20 30 10 --
05. PH Ltd., is a manufacturing company having three production departments, ‘A’, ‘B’ and ‘C’ andtwo service departments ‘X’
2011:
Total A B C X Y
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Directmaterial 1,000 2,000 4,000 2,000 1,000
Directwages 5,000 2,000 8,000 1,000 2,000
Factoryrent
Power
Depreciation 4,000
2,5000
1,000
Otheroverheads
Additionalinformation:
Area(Sq.ft.) 9,000

500

250

500

250

500
Capital value of assets(Rs.lacs) 20 40 20 10 10
Machinehours 1,000 2,000 4,000 1,000 1,000
Horse powerofmachines 50 40 20 15 25
A technical assessment of the apportionment of expenses of service departments is as under:
ABCXY
Service Dep X (%) 45 15 30 - 10
Service Dep Y(%) 60 35 - 5 -
Required:
(i) A statement showing distribution of overheads to various departments.
(ii) A statement showing re-distribution of service departments expenses to production departments.
ndtwo service departments ‘X’ and ‘Y’. The following is the budget for December

ents.