The Homes Garments Company has decided to distribute the costs of service
departments by the algebraic method. The producing departments are Cutting
department and Sewing department. The service departments are Maintenance and
cafeteria, and monthly data are:
Actual factory overhead
Costs before distribution Services provided by
(Rs.) Maintenance Cafeteria
Cutting department 126,000 40% 50%
Sewing department 87,000 50% 30%
Maintenance department 30,000 --- 20%
Cafeteria 26,400 10% ---
Required::
Total factory overhead of producing department Cutting after distribution of service
department costs.