Question

Overhead cost is to be distributed among manufacturing, selling and administration in the ratio of 5/12 to 2/3 to 1/7 If the total cost was $11,536, how should it be distributed to these departments?

Answer 1

To distribute the overhead cost among the manufacturing, selling, and administration departments, the amounts allocated are $4,806.33, $7,690.67, and $1,648.00 respectively.

Step-by-step explanation:

To distribute the overhead cost among the manufacturing, selling, and administration departments in the given ratio, we need to calculate the amount allocated to each department.

Total cost = $11,536

Manufacturing: (5/12) x $11,536 = $4,806.33

Selling: (2/3) x $11,536 = $7,690.67

Administration: (1/7) x $11,536 = $1,648.00

Therefore, the overhead cost should be allocated to the manufacturing, selling, and administration departments as follows:

Manufacturing: $4,806.33

Selling: $7,690.67

Administration: $1,648.00