A company has two production departments and two service departments. The data relating to a period are as under:
The power requirement of these departments are met by a power generation plant. The said plant incurred an expenditure, which is not included above, of Rs. 1,21,875 out of which a sum of Rs. 84,375 was variable and the rest fixed. After apportionment of power generation plant costs to the four departments, the service department overheads are to be redistributed on the following basis:
You are required to:
(i) Apportion the power generation plant costs to the four departments.
(ii) Re-apportion service department cost to production departments.
(iii) Calculate the overhead rate per direct labour hour of production departments, given that the direct wages rates of PD1 and PD2 are Rs. 5 and Rs 4 per hour respectively.
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