Following are the expenses incurred in respect of two production departments X and Y and one service department Z.

Machines are depreciated @ 10% p.a.

(a) Compute the machine hour rate of overhead absorption for each of the centres.

(b) Job X passes through all the three cost centres as stated in question

(a) and the requirements in each centre is as follows: Centre I: 4 hours;

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Rs. (a) Power expenses 8,000 (b) Labour-welfare 4,500 expenses (c) Rent (d) Insurance (e) Depreciation: 7,200 11,600 Machinery 20,000 Building 7,000 (f) Lighting 2,400 Additional Information: X Y Z (i) KWH installed 12 10 2 (ii) Light points 15 20 5 (iii) Area occupied (Sq. ft) 1,000 800 600 (iv) No. of employees 20 8 2 (v) Machine hrs worked 2,000 1,500 500 Service department Z has rendered service to the pro- duction department equally. Ascertain the total cost of the departments and the overhead rate per machine hour for the production departments.