Just go through the table line by line
Depreciation of aircraft: £36,400 in total but no detail on how much is attributable to each department.
So based on the detail we have been give: (Net book value of aircraft (£000), Planned number of miles flown, Floor space (square metres), and Number of employees) the one most likely to help in an apportionment basis is Net book value of aircraft (£000).
Total overhead cost =............ £36,400 = just over £0.02 per £1,000 of NBV
Total value of basis: (NBV).....£1,800,000
If you leave this value in your calculator then the full value can be used in the subsequent calculations.
As £1,080,000 of the NBV is for the scheduled services cost centre, then multiply the £0.02… by 1080000 to apportion the cost = £21,840
As £720,000 of the NBV is for the charter flights then multiply the £0.02.. by 720,000 = £14,560
This now gives you the apportionment for depreciation.
Aviation fuel and other variable costs £42,200
Select a basis for apportionment
Carry out the analysis in the same way as for depreciation.
Pilots and aircrew salaries:
We have the details for these so no calculations are needed. These are allocated to the respective cost centres.
Rent and rates and other premises costs
Select a basis for apportionment
Carry out the analysis in the same way as for depreciation.
Indirect labour costs
We have the details for these so no calculations are needed. These are allocated to the respective cost centres.
The next step is to total each column to find the “Totals”
Once you’ve done this
Reapportion Aircraft maintenance and repairs
Exactly the same approach as before, this time using the total you calculated
You are told to apportion on the basis of time spent in each cost centre
Carry out the analysis in the same way as for depreciation.
Reapportion Fuel and parts store
Exactly the same approach as before, this time using the total you calculated
You are told to apportion on the basis of % of issues for each cost centre
Carry out the analysis in the same way as for depreciation.
Reapportion General admin.
Exactly the same approach as before, this time using the total you calculated
You are told to apportion half to Scheduled services and half to Charter flights
Carry out the analysis in the same way as for depreciation.
You should then total the columns. Only Scheduled services and Charter flights should have values, the other cost centres should be nil.