Cost Allocation Repeated Distribution Example

Example
Item	Machine Dep.	Maint. Dep.	Service 1	Service 2
Factory Overheads	5,000	4,000	2,000	1,000
No of Hours Service 1	10000	6000		1000
No of Hours Service 2	12,000	4,000	4000
Solution
Items	Machine Dep.	Maint. Dep.	Service 1	Service 2
Overheads	5,000	4,000	2,000	1,000
Service 1	1,180	700	(2,000)	120
	6,180	4,700	-	1,120
Service 2	672	224	224	(1,120)
	6,852	4,924	224	-
Service 1	132	78	(224)	13
	6,984	5,002	-	13
Service 2	8	5	-	(13)
	6,992	5,007
Service departments apportionment bases
Particular	Machine Dep.	Maint. Dep.	Service 1	Service 2
Service 1	10000	6000		1000
Allocation Bases	59%	35%	0%	6%
Service 2	12000	4000	4000
Allocation Bases	60%	20%	20%	0%