Use the information below to answer question . Prime cost..................₦12 100 Lighting....................₦10 000 Heating.....................₦15 000 F...

Answer Details

To find the factory overhead, we need to first determine the production department's share of the lighting and heating costs. The lighting cost is ₦10,000, and the production department's share is 1/4, so their portion of the lighting cost is: 1/4 x ₦10,000 = ₦2,500 The heating cost is ₦15,000, and the production department's share is 1/2, so their portion of the heating cost is: 1/2 x ₦15,000 = ₦7,500 Therefore, the total production department's share of the overhead cost is: ₦2,500 + ₦7,500 = ₦10,000 We can now find the factory overhead by subtracting the prime cost and the production department's share of the overhead from the total cost of lighting and heating: Total cost of lighting and heating = ₦10,000 + ₦15,000 = ₦25,000 Factory overhead = ₦25,000 - ₦12,100 - ₦10,000 = ₦2,900 Therefore, the factory overhead is ₦2,900. Answer option (iv) is the closest to this value.