Atul Ltd.

Atul Ltd. has two production departments X and Y, and two service
departments P and Q. X produces product Z while department Y
produces product B.
The following are the details of costs incurred during January 2014.
Direct Material Rs. Direct Labour Rs.
Department X 21000 Department X 12000
Department Y 9000 Department Y 9000
Supplies Supervisory salary
DepartmentX 750 Department X 1850
Department Y 600 Department Y 2250
Department P 450 Department P 4500
Department Q 300 Department Q 6000
The output of Z is 3,000 units, while that of product B is 1,500 units.
Supplies of service departments are charged to production
department as a percentage of direct labour. You are required to
calculate responsibility costs taking each department as responsibility
centre.
Atul Ltd.
Dept X Dept Y
Product Z B Total
Output in units 3000 15000
Rs. Rs. Rs.
Direct Material 21000 9000 30000
Direct Labour 12000 9000 21000
Supplies 750 600 1350
Supervisory salary 1850 2250 4100
Allocation of cost of services from Dept. P 2829 2121 4950
Allocation of cost of services from Dept. Q 3600 2700 6300
Total Cost (Rs.) 42029 25671 67700
Unit responsibility cost of each product (Rs./unit) 14.01 1.71
check 67700
Production
Dept P Dept Q
Rs. Rs.
Supplies 450 300
Supervisory salary 4500 6000
4950 6300
Service