2. Triangle Ltd have a product that absorbs overheads at a rate of 30 per labour hour. It takes 4 hours to make each unit. Closing inventories in November were 1,500 units, and in October were 1,600 units. If Triangle used marginal costing methods instead of absorption, what would the difference in profit have been in November? [3 marks] 3. What are the three key criteria that we can use to help us to identity if a cost is relevant? 1 [3 marks] new gs View Help Acrobat 6. Apex Ltd manufactures beds and has budgeted for the following factory overhead costs for next year: Insurance of plant and equipment Rent and Rates 25,000 90,000 Heat & Light 55,000 Indirect Labour Maintenance 22,000 Stores 25,000 47.000 Total 217,000 The factory has four departments, Weaving, Cutting, Stores and Maintenance. The following information is available: Department Cutting Assembly Stores Maintenance Carrying value of equipment 85,000 15,000 Floor Space (sq metres) 750 900 1,500 750 Issues of materials from stores 1,200 2,200 Budgeted machine hours 8,500 2,500 Budgeted labour hours 4,500 1,200 60% of maintenance relates to the cutting department, 30% to assembly and 10% to Stores Required: a) Calculate the appropriate overhead recovery rates for the Cutting and Assembly N1527 Introduction Management Accounting departments to the nearest penny. Layout References Mailings Review View Help Acrobat 60% of maintenance relates to the cutting department, 30% to assembly and 10% to Stores Required: a) Calculate the appropriate overhead recovery rates for the Cutting and Assembly 4 N1527 Introduction Management Accounting departments to the nearest penny. [9 marks] b) Discuss the practical limitations of traditional absorption costing and suggest an alternative approach. [6 marks] [Total 15 marks] END OF PAPER