1. Profit analysis: Prepare a brief overview of the 20X6 results (Exhibit 1) in the report.

Your discussion should highlight significant changes between 20X5 and 20X6

operations and between 20X6 actual and 20X6 budgeted operations. (8 marks)

2. Costing analysis (19 marks):

a) Calculate overhead applied and the resulting over- or underapplied overhead

using the traditional costing approach. Base this on the existing method of

allocating service overhead using direct labour hours as the allocation base. The

actual wages and benefit rate was the same as budgeted at $13.20 per hour.

(2 marks)