A company has two production departments and two service departments. The data relating to a kperiod…

A company has two production departments and two service departments. The data relating to a kperiod are as follows.

Particulars

Prod. Dept. I

Prod. Dept. II

Service Dept I

Service Dept II

Direct Materials

80,000

40,000

10,000

20,000

Direct Wages

95,000

50,000

20,000

10,000

Overheads

80,000

50,000

30,000

20,000

Power requirement at normal capacity operation (Kwh)

20,000

35,000

12,500

17,500

Actual power consumption (Kwh)

13,000

23,000

10,250

10,000

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.

Departments

Prod. Dept I

Prod. Dept II

Service Dept I

Service Dept II

Service Dept I (%)

50

40

10

Service Dpet II

60

20

20

You are required to,

i. Apportion the power generation plant costs to the four departments

ii. Reapportion service department cost to production departments

iii. Calculate the overhead rate per direct labor hour of production departments, given that the direct wages rates of Production Dept I, II are Rs. 5 and Rs. 4 per hour respectively.