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Q.1A company’s production costs for the current ending March 31 are givenbelow:ItemProduction departmentsService departmentsTotalP1P2P3OfficeStoresWorkshopDirect wagesRs. 20,000Rs. 25,000Rs. 30,000---Rs. 75,000Direct materials30,00035,00045,000---1,10,000Indirect materials2,0003,0003,000Rs. 1,000Rs. 2,000Rs. 2,00013,000Indirect wages3,0003,0004,00010,00010,0005,00035,000Area (sq. meters)2002503001501002501,250Book value of machinery30,00035,00025,000--15,0001,05,000Total horse power(H.P)of machines152025--565Machine-hoursworked10,00020,00015,000--5,00050,000The other expenses are as follows:RentRs. 12,500Insurance1,050Depreciation (per centof value of machinery)15Power3,800Light1,250You are required to prepare an overhead analyses sheet for the departments showing clearly the basis of apportionment where necessary.Solution:Overhead analyses sheetItembasisProductiondepartmentsServicedepartmentsTotalP1P2P3OfficeStoresworkshopIndirectmaterialsAllocationRs. 2,000Rs. 3,000Rs. 3,000Rs. 1,000Rs. 2,000Rs. 2,000Rs. 13,000IndirectWagesAllocation3,0003,0004,00010,00010,0005,00035,000RentArea2,0002,5003,0001,5001,0002,50012,500InsuranceValue of machine300350250--1501,050DepreciationValue of machine4,5005,2503,750--2,25015,750PowerHorse8771,1691,462--2923,800powerLightArea2002503001501002501,250Total12,87715,51915,76212,65013,10012,44282,350OfficeDirect3,3734,2175,060(12,650)---

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