Solution for QID #28799: A manufacturing company has two production cost centres (Dep | StudyHelpMe

A manufacturing company has two production cost centres (Department A & B) and one service cost centre (Department C) in its factory. A predetermined overhead absorption rate (to two decimal places$) is established for each of the production cost centre on the basis of budgeted overheads and budgeted machine hours. The overheads of each production cost centre comprise directly allocated costs and a share of the costs of the service cost centre. Budget production overhead data for a period is as follows:                                       Department A            Department B           Department C Allocated Cost                   $217,860.00           $374,450.00               $103,970.00 Apportioned Costs              $45,150.00             $58,820.00              ($103,970.00) Machine Hours                   $13,730.00            $16,110.00                  Nil Direct Labour Hours         $16,360.00            $27,390.00                   Nil   Actual production overhead costs and activity for the same period are?                                         Department A            Department B           Department C Allocated Costs               $219,917.00                $387,181.00            $103,254.00 Machine Hours                 $13,672.00                 $16,953.00               Nil Direct labour Hours         $16,402.00                  $27,568.00              Nil     70% of the actual costs Department C are to be apportioned to production cost centres on the basis of the actual machine hours worked and the remainder on the basis of actual direct labour hours   Required:   (A) Calculate the production overhead absorption rate for the period                      (8marks) Determine the under or over absorption of production overhead for the period in each production cost centre.           (Show all workings)