PRIMARY DISTRIBUTION OF OVERHEADSILLUSTRATIONSABC Company has three (3) productions departments A,B, and Cand two (2) servicesdepartments D and E. The following figures are extracted from the records of the companyCost ItemsAmount CostRent and Rates10,000Depreciation of Machinery20,000Electricity3,000Administrative Expense20,000The Following details are also availablesResourcesDept. ADept. BDept. CDept. DDept. ETotalFloor Area (sqm)1,5001,5003,0002,0002,00010,000Direct Wages (in peso)10,00015,00050,00020,0005,000100,000House Power of Machines40301002010200Value of Machines50,00010,00025,00012,0003,000100,000 Step 1: IdentifyFOH CostService provided to:Service DepartmentProduction Department

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FOH Cost Service provided to: Service Department Production Department

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter4: Job-order Costing And Overhead Application

Section: Chapter Questions

Problem 16DQ: (Appendix 4B) Describe the difference between producing and support departments.

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Question

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PRIMARY DISTRIBUTION OF OVERHEADS
ILLUSTRATIONS
ABC Company has three (3) productions departments A,B, and Cand two (2) services
departments D and E. The following figures are extracted from the records of the company
Cost Items
Amount Cost
Rent and Rates
10,000
Depreciation of Machinery
20,000
Electricity
3,000
Administrative Expense
20,000
The Following details are also availables
Resources
Dept. A
Dept. B
Dept. C
Dept. D
Dept. E
Total
Floor Area (sqm)
1,500
1,500
3,000
2,000
2,000
10,000
Direct Wages (in peso)
10,000
15,000
50,000
20,000
5,000
100,000
House Power of Machines
40
30
100
20
10
200
Value of Machines
50,000
10,000
25,000
12,000
3,000
100,000

Step 1: Identify
FOH Cost
Service provided to:
Service Department
Production Department

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