1 ICare Pte Ltd manufactures tables. The tables are produced in two departments - A and B. The operation in department A uses mainly machines and department B uses mainly skilled craftsmen to assemble and finish the final product. The annual budgeted machine and direct labour hours for department A are 60,000 and 14,000 respectively. For department B, they budgeted to use 30,000 machine and direct labour hours respectively. For September 2015, department A used 5,000 machine hours and 1,116 direct labour hours. In the month, the total manufacturing overheads applied to jobs in department A amounted to $7,500. For the same month, department B's usage of machine and direct labour hours were 2,750 and 2,500 respectively. The total manufacturing overheads applied to jobs in department B was $6,250. Job 1012 was started and completed in September 2015, and incurred the following actual costs in the two departments: Department A (S) Direct materials used 2,500 Direct manufacturing labour 2,500 Indirect manufacturing labour 100 Indirect materials used 50 Lease on equipment 625 100 Department B ($) 3,500 3,500 200 75 375 125 Utilities In total, Job 1012 incurred 950 machine hours and 220 direct labour hours in Department A, and 460 machine hours and 420 direct labour hours in Department B. The company uses a normal costing system and departmental overhead rates for applying overhead to production. Required: (a) Determine the budgeted manufacturing overhead rate for each department. (b) (4 marks) Prepare the necessary journal entries to describe and summarize September 2015 transactions in Department A for Job 1012. (8 marks) (c) (d) Calculate the total normal product cost for Job 1012. If ICare wishes to make a 15% profit margin on Job 1012, how much should it charge for Job 1012? (Give your answer to the nearest dollar). (6 marks) Discuss reasons why ICare prefers using a normal costing system to an actual costing system. Explain the merits of ICare using departmental overhead rates over a plant wide overhead rate. (7 marks)