Accounting for overhead

wilsondm

Hi everyone, here is a question that i dont have the answer

The information given below relates to the forthcoming period for a manufacturer’s operation.
There are four cost centers of which two are involved in production and two are service cost
centers.

…………………………………………………............Production………...........……Service...........
………………………………Total……......Machining……Assembly……Canteen………Stores
………………………………….$……..….......$……....….......$……......……$....….........….$
Allocated costs………..70,022……......…21,328………29,928……….8,437………....10,329
Other costs
Rent and rates………….4,641
Buildings insurance…..3,713
Electricity and gas…….6,800………………………………..Table 1
Plant depreciation…….28,390
Plant insurance………….8,517
…………………………….._______
………………….Total……122,083
…………………………….._______

Area occupied (square metres)..…..........…7,735…………...6,188…….....1,547….......3,094
Plant at cost ($’000)…………………........…1,845………..…..852……....…...—…….…..142
Number of employees……………….........…600………….…..300………......30………….70
Machine hours…………………………........27,200………..….800……….......—……...….—
Direct labor hours…………………….......…6,800……..……18,000……....…—……….....—
Number of stores requisitions……..............27,400…….....….3,400……..….—……….....—

a. Complete the above table 1 by using the most appropriate base.

My answer:

………………………………..Total……..Machining……Assembly……Canteen………Stores
Allocated costs……………70,022………21,328………29,928………8,437………..10,329
Rent and rates…………….4,641………….1934………..1547…………387……………773
Buildings insurance………3,713…………1547………..1238…………309…………….619
Electricity and gas………..6,800…………2833………..2267…………567……………1133
———————————
Plant depreciation……….28,390……….18,450………..8,520……….—…………..1,420
Plant insurance…………….8,517……….5535………….2,556…………—…………….426
……………………………
……………………….Total…….122,083……51,627………46,056………9,700………14,700
Apportion Canteen…………………………..6000…………3000……….(9,700)………..700
Apportion Stores…………………………….13700………..1700………—…………….(15400)
———————————-
……………………….Total……………………..71,327………50,756

My questions: is it correct?

(b). Use this information to calculate a production overhead absorption rate for Machining
department and for Assembly department based on machine hours and labor hours
respectively. Round off to nearest dollars for the above table.

My questions:

How to calculate the production overhead absorption rate?

Thanks a lot for your help.

wilsondm