1. Capstone Ltd operates an absorption costing system. The company has 2 production centres, Machining and Finishing, together with 2 service departments. The following budgeted information is available: Total Machining Finishing Maintenance Canteen Indirect labour 1,600,000 600,000 640,000 200,000 160,000 Consumables 360,000 120,000 140,000 28,000 72,000 Electricity 240,000 Rent and rates 280,000 Depreciation 360,000 Supervision 240,000 Heating 360,000 3,440,000 You have ascertained that the most suitable basis of apportionment is listed below for the overhead costs shown: Electricity KwHr consumed Rents & rates Floor space Depreciation Machine cost Supervision Staff nos Heating Floor space The following budgeted information is also available: Total Machining Finishing Maintenance Canteen Floor space (sq m) 400,000 120,000 180,000 60,000 40,000 Machinery cost () 3,600,000 2,000,000 1,300,000 200,000 100,000 No. of employees 1,200 600 240 360 0 No. of kilowatt hours 120,000 60,000 48,000 8,000 4,000 Additional information: Budgeted hours are 65,000 machine hours for the machining department and 50,000 labour hours for the finishing department. The maintenance department provides 30,000 hours of service support to the machining department and 20,000 hours of service support to the finishing department. The company uses outside sub-contracted staff to operate the canteen.

REQUIRED (c) Calculate the overhead to be absorbed to a product, which is to be manufactured in the near future given that it takes 15 hours of machine time from the machining department and 17 hours of labour from the finishing department. (8 marks)