BCF Ltd manufactures a product known as a Grunge. Direct material and labour costs for each Grunge are £300 and £150 respectively. To produce a Grunge requires 20 hours, comprising 10 hours in machining, 7 hours in assembly and 3 hours in finishing. Information for each department is:

Calculate the cost of producing a Grunge using a departmental overhead recovery rate.

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Machining Assembly Finishing Overhead costs () 120,000 80,000 30,000 Labour hours 20,000 10,000 10,000