In a factory, four types of jobs are performed in separate production departments A, B, C and D. In addition there are three service departments, K, L and M. Costs have been allocated to the departments as follows:

The expenses of the service departments are to be allocated between other departments as follows:

In departments A and C the job costing is to use an overhead rate per direct labour hour, while in B and D a machine hour rate will be used. The number of direct hours and machine hours per department is expected to be:

You are required to calculate:

(a) The overhead rates for departments A and C.

(b) The overhead rates for departments B and D.

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Production departments Service departments A B C D K L M Indirect labour 8,000 12,000 16,000 4,000 3,000 6,000 8,200 Other expenses 5,400 6,200 7,200 3,000 9,000 4,000 4,000