Please explain whether I need to reapportion the service cost center direct labour hours to the prod

Please explain whether I need to reapportion the service cost center direct labour hours to the production cost centers to find the departments OAR.

Please find the overhead absorption rates for the departments. Olex is a wrist watch manufacturer in Sri La into complete watches. The company has two ne production cost centers are labour intensive) and stores. Following details have been pt ended 30th June 2018. uports wrist watch parts and assembles as two production cost centers as assembly and finishes ar intensive) and two service cost centers as servicing ve been provided for you with regards to Olex for the month Stores Direct materials (Rs. '000) Direct labour at Rs. 400 per hour Servicing 1,000 200.000 200 50,000 Finishing 5,000 150.000 100 75 200 Indirect materials (Rs. '000) Indirect labour (Rs. '000) 50 50 Assembly 10,000 600,000 600 75 Floor area (m) 250 Number of employees Plant and equipment value (Rs. ‘000) 200,000 Number of store requisitions 10 25 100 150 4. 1100.000 5 50,000 15 50,000 – he overhead costs for the period were as follows: Absorption base Rs. 00 Cat 50,000 600,000 30000 100.000 209 labour R400 per hour Indirect materials (Rs. 000) indirect labour (R Indirect “000) Floor area (m) Number of employees 150 .00 250 200 100 50.000 al and equipment Value (Rs.000 Number of store requisitions 200.000 100.000 50,000 10 55 Rs.000 50 100 40 The overhead costs for the period were as follows: Cost Absorption base Electricity Floor area Building rent Floor area Depreciation of plant and equipment Plant & equipment value Administration cost Number of employees Staff related costs Number of employees Total overhead cost 30 280 Notes: 1. The servicing department cost needs to be re-apportioned to Assembly and finishing in the proportion of 3:2 ratio. 2. The actual-labour hours incurred during the period in Assembly department was 1,580 hours and in Finishing department was 365 hours. 3. The actual overheads incurred during the period in Assembly was Rs. 1,195,630 and in Finishing was Rs. 400,500.

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