Scaffolder Ltd. is a manufacturing company making construction items. The production process is divided into two production departments, Assembly and Finishing. There is one service department, the Stores department, which is used by both the Assembly and the Finishing departments. The relevant information for the year ahead is as follows:
Indirect Costs for All Three Departments in Total:
Item
Total £
Maintenance
40,000
Rent
80,000
Depreciation
500,000
TOTAL
620,000
The following information is available about each department:
Item
Assembly (£)
Finishing (£)
Stores (£)
Floor Space (sq meters)
40,000
45,000
15,000
Value of machinery (£)
160,000
20,000
20,000
Maintenance hours
3,000
2,000
Stores requisitions
2,000
3,000
After allocating the indirect costs to the Assembly, Finishing and Stores departments using a suitable method for each department and reallocating the service department costs over production departments, which are the total costs for each department?
Select one:
a.
Total costs for the assembly department equal to £620,000, for the finishing department equal to £480,800 and for the Stores Department equal to £0.
b.
Total costs for the assembly department equal to £480,800, for the finishing department equal to £139,200 and for the Stores Department equal to £0.
c.
Total costs for the assembly department equal to £456,000, for the finishing department equal to £102,000 and for the Stores Department equal to £62,000.
d.
None of the answers is correct
e.
Total costs for the assembly department equal to £56,000, for the finishing department equal to £52,000 and for the Stores Department equal to £12,000.