M1). Sky Ltd. is a manufacturing company. The production process is divided into two production departments: Assembly and Finishing. There is one service department, the Stores department, which is used only by the Finishing department. The relevant information for the year ahead is as follows: Total Overheads for all the departments: Item Total (£) Depreciation 300,000 300 , 000 Rent 200,000 200 , 000 TOTAL 500,000 500 , 000 The following information is available about each department: Item Assembly Finishing Stores Floor Space (m2) 70,000 70 , 000 25,000 25 , 000 5,000 5 , 000 Value of machinery (£) 85,000 85 , 000 15,000 15 , 000 Labour hours 2,000 2 , 000 500 500 Considering this information, which of the following statements is true? a. The Overheads Absorption Rate using labour hours for the Assembly department equals £210 210 . b. The Overheads Absorption Rate using labour hours for the Finishing department equals £210 210 . c. Total overheads allocated to the Assembly department equal £105,000 105 , 000 and total overheads allocated to the Finishing department equal £395,000 395 , 000 . d. None of the answers is true.
M1).
Sky Ltd. is a manufacturing company. The production process is divided into two production departments: Assembly and Finishing. There is one service department, the Stores department, which is used only by the Finishing department. The relevant information for the year ahead is as follows: Total
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