Drawrod Pic has three manufacturing cost centres: Punching, Stamping and Assembly. In addition the company has two

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Drawrod Pic has three manufacturing cost centres: Punching, Stamping and Assembly. In addition the company has two service cost centres: Maintenance and Inspection.

The following details the estimated production overhead expenses for the year to the 31 December 19x2:

The company's bases for the absorption of overheads are as follows.
Punching Machine hours Stamping Machine hours Assembly Working hours

(a) Calculate the absorption rates for the Punching, Stamping and Assembly cost centres (calculations to the nearest penny).

(b) Specify and explain the factors to be considered in determining whether to use a single factory-wide overhead absorption rate for all factory overheads or a separate rate for each manufacturing cost centre, with reference to the system applied to Drawrod Pic.

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