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Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafet

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Answer #1

Let maintenance be X and Cafeteria be Z

By refering the table in question we get following equation:

X = 40,000 + 0.8 Z ..(1)

Z = 32000 + 0.2 X ..(2)

Substituting 2 in 1,

X = 40,000 + 0.8 (32000 + 0.2 X)

So, X = 78095

and Z = 47619

Maintenance cafe machining assembly total
OH before allocation (given) 40000 32000 99000 64400 235400
Allocation:
Maintenance (2:5:3) on 78095 -78095 15619 39048 23428 ---
cafe (8:1:1) 38095 -47619 4762 4762 ---
Total NIL NIL 142810 92590 2354000

Please comment in case of any query regarding the solution.

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