SHERMAN MOTORS

Allocation of Overheads

Allocated fixed
Fraction of total Fixed overhead Variable overhead Total overhead
Model 101 Model 102 overhead per
capacity utilisation Fixed per unit per unit per unit
month
Overhead
per month
Current Cap. per Cap. Current Cap. per Cap. Model Model Model Model Model Model
Deptt. Model 101 Model 102 Model 101 Model 102
Prodn. month Utilisn. Prodn. month Utilisn. 101 102 101 102 101 102
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18)
= (4) / = (7) / = (10)* = (10)* = (11)/ = (12)/ from from = (13) + = (14) +
=(2)/(3) =(5)/(6)
[(4)+(7)] [(4)+(7)] (8) (9) (2) (5) Ex 3 Ex 3 (15) (16)

Metal
333 2500 0.13 1500 3500 0.43 0.24 0.76 135000 32009 102991 96 69 120 100 216 169
Stamping

Engine
333 3333 0.10 1500 1667 0.90 0.10 0.90 85000 8495 76505 26 51 105 200 131 251
Assy

Model 101
333 2250 0.15 Nil Nil N. A. 1.00 0.00 90000 90000 0 270 ---- 175 ---- 445 ----
Final Assy

Model 102
Nil Nil N. A. 1500 1500 1.00 0.00 1.00 75000 0 75000 ---- 50 ---- 125 ---- 175
Final Assy