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A company reapportions the costs incurred by two service cost centres, materials handling and inspection, to the three production cost centres of machining, finishing and assembly.
The following are the overhead costs which have been allocated and apportioned to the five cost centres: (Sh.000)
Machining 400
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Order Paper NowFinishing 200
Assembly 100
Materials handling 100
Inspection 50
Estimates of the benefits received by each cost Centre are as follows:
Materials
Machining Finishing Assembly handling Inspection
% % % % %
Materials handling 30 25 35 — 10
