Janak Ltd. has two production departments M and N and two service departments R and S. After primary distribution, the following were the departmental overheads for the month of March 1998:
|
Rs |
|
|
Production departments: |
|
|
M |
50,000 |
|
N |
40,000 |
|
Service departments: |
|
|
R |
12,000 |
|
S |
16,000 |
A detailed survey revealed that the services of department R are utilized by the production departments in the ratio 7:3. The services of S were used by M and N equally. Ascertain the total overhead of departments M and N by preparing a secondary distribution summary.
Using the repeated distribution method, solve the following problem:
|
(a) Service department A—expenses are to be allocated in the ratio 30:30:20:20 to production departments X, Y and Z and the service department B. |
|
|
(b) Service department B—expenses are to be allocated in the ratio 50:20:20:10 to production departments X, Y and Z and the service department A. |
|
|
(c) Expenses incurred: |
|
|
Production departments |
|
|
X |
Rs 50,000 |
|
Y |
Rs 20,000 |
|
Z |
Rs 25,000 |
|
Service departments |
|
|
A |
Rs 5,000 |
|
B |
Rs 8,000 |