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)
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Materials handling 100
Estimates of the benefits received by each cost Centre are as follows:
Machining Finishing Assembly handling Inspection
% % % % %
Materials handling 30 25 35 — 10