Allocation Example
Example 1
|
Items
|
Production
|
Maintenance
|
||
|
Consumable
|
10,000
|
5000
|
||
|
Factory Rent
|
60,000
|
|
||
|
Electricity
|
80,000
|
|
||
|
Fuel (Liters)
|
4000
|
800
|
||
|
Area Sq Feet
|
1200
|
800
|
||
|
Fuel Rate $ 10
|
|
|
||
Solution |
||||
|
Items
|
Bases
|
Total
|
Production Department
|
Maintenance Department
|
|
Consumable material
|
Direct
|
15,000
|
10,000
|
5,000
|
|
Fuel
|
Direct
|
48,000
|
40,000
|
8,000
|
|
Factory Rent
|
Area
|
60,000
|
36,000
|
24,000
|
|
Electricity
|
Area
|
80,000
|
48,000
|
32,000
|
|
|
|
|
|
|
|
|
|
203,000
|
134,000
|
69,000
|
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