Barclay Pic uses a predetermined overhead rate in applying overheads to product costs on a direct labour cost basis for cost centre X and on a machine hour basis for cost centre Y. The following details the estimated forecasts for 19x 1:

X y Direct labour costs £100000 £35000 Production overheads £140000 £150000 Direct labour hours 16000 5000 Machine hours 1000 20000

(a) Calculate the predetermined overhead rate for cost centres X andY.

(b) BNH is one of the products manufactured by Barclay. The manufacturing process involves the two cost centres X and Y. The following data relate to the resources that were used in the manufacture of the product during 19x1:

X y Direct materials £20000 £40000 Direct labour £32000 £21000 Direct labour hours 4000 3000 Machine hours 1000 13000 Determine the total production cost for product BNH using full costing.

(c) Assuming that product BNH consists of 20000 units, what is the unit cost of BNH?

(d) At the end of the year 19x1 it was found that actual production overhead costs amounted to £160000 in cost centre X and £138000 in cost centre Y. The total direct labour cost in cost centre X was

£144 200 and the machine hours used were 18 000 in cost centre Y during the year. Calculate the over- or under-absorbed overhead for each cost centre.