Manufacturing Assembly Finishing Stores Maintenance Total

£ £ £ £ £ £
Allocated Overheads 70,000 80,000 60,000 4,000 30,000
Factory Rent 16000 8000 8000 4000 4000 40,000
Depreciation of Machine 20800 15600 10400 2600 2600 52,000
Heat and Light 6300 4500 4500 1800 900 18,000
Security 6000 4500 3000 750 750 15,000
Supervision 21000 15000 9000 9000 6000 60,000
subtotal Stores 22,150
6,645 6,645 6,645 - 2,215 22,150
subtotal Maintenance - 46,465 46,465
23,233 13,940 9,293
total 169,978 148,185 110,838

labour hours 15,000 12,500 9,000

hourly rate 11.33 11.85 12.32
Modern Antiques Ltd is a company that specialises in producing replica antique furniture.
The company is made up of 3 production departments (Manufacturing, Assembly and Finishing)
and 2 service departments (Stores and Maintenance).
The Management Accountant has collected the following information relating to next year’s budget.

Allocated Overheads £
Manufacturing 70,000
Assembly 80,000
Finishing 60,000
Stores 4,000
Maintenance 30,000

Unallocated Overheads £
Factory Rent 40,000
Depreciation of Machinery 52,000
Heat and Light 18,000
Security 15,000
Supervision 60,000
185,000

General information

Manufacturing Assembly Finishing Stores Maintenance

% % % % %
Area 40 20 20 10 10
Employees 35 25 15 15 10
Electricity 35 25 25 10 5
Asset value 40 30 20 5 5

Service cost centres are to be apportioned as follows:

Manufacturing Assembly Finishing Stores Maintenance

% % % % %
Stores 30 30 30 10
Maintenance 50 30 20

Direct labour hours 15,000 12,500 9,000

Required ;
a. Produce an overhead analysis table from the above information.
b. Calculate appropriate absorption rates.

Manufacturing Assembly Finishing Stores Maintenance

Allocated overhead 70,000 80,000 60,000 4,000 30,000
Factory Rent 40,000
Depreciation of Machinery 52,000
Heat and Light 18,000
Security 15,000
Supervision 60,000
 Manufacturing
Allocated overhead 70,000
Factory Rent 40,000 16000
Depreciation of Machinery 52,000 20800
Heat and Light 18,000 7200
Security 15,000 6000
Supervision 60,000 21000
141,000
6,645

subtotal Maintenance

Service cost centres are to be apportioned as follows:

0 141000
0 6645
STORE 30 30
MAINTAIN 50 30

Direct labour hours 15,000 12,500

Assembly Finishing Stores Maintenance
80,000 60,000 4,000 30,000
8000 8000 4000 4000
15600 10400 2600 2600
3600 3600 1800 1800
4500 3000 750 750
15000 9000 9000 6000
126,700 94,000 22,150 45,150
6,645 6,645 2,215
47,365

126700 94000 22,150

6645 6645
30 10
20

9,000
Total

40000
52000
18000
15000
60000
185,000
22,150