Barossa Manufacturing Has the Following Overhead Costs in Their Four

question 40

Essay

Barossa Manufacturing has the following overhead costs in their four departments.Inspection and Maintenance are the service departments,while Assembly and Finishing are the production departments.There is currently $30 000 in Inspection overheads,$60 000 in Maintenance overheads,$70 000 in Assembly overheads and $90 000 in Finishing overheads.
$\begin{array}{lllrr}&\text { Inspection}&\text { Maintenance } & \text { Assembly }& \text { Finishing }\\\text { Inspections } & 20 & 200 &400 & 300 \\\text { Machine hours } & 100 & 30 & 150 & 250\end{array}$


Inspection overheads are allocated to production departments using the number of inspections,while Maintenance overheads are allocated to production departments using machine hours.The company has decided to use the reciprocal method to allocate overhead costs to the production departments.
Required:
A.How much overhead is allocated to the production departments from the service departments?
B.What is the total overhead in the production departments after the re-allocation?