Intermediate: Overhead analysis, calculation of overhead rate and overhead charged to a unit of output A company makes a range of products with total budgeted manufacturing overheads of £973 560 incurred in three production departments (A, B and C) and one service department.

Department A has 10 direct employees, who each work 37 hours per week.

Department B has five machines, each or which is operated for 24 hours per week.

Department C is expected to produce 148 000 units of final product in the budget period.

The company will operate for 48 weeks in the budget period.

Budgeted overheads incurred directly by each department are:

(a) Calculate an appropriate predetermined over¬
head absorption rate in each production department. (9 marks)

(b) Calculate the manufacturing overhead cost per unit of finished product in a batch of 100 units which take 9 direct labour hours in depart¬ ment A and three machine hours in depart¬ ment B to produce.

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Production department A Production department B 261 745 226 120 Production department C 93 890 Service department 53 305 The balance of budgeted overheads are appor- tioned to departments as follows: Production department A 40% Production department B 35% Production department C 20% 5% Service department Service department overheads are apportioned equally to each production department. You are required to: