A company has three production departments (X, Y and Z) in its factory. After completion of all overhead allocation and apportionment, the production department budgets for the year 2016 included the following: Overhead costs Direct labour hours Machine hours Overhead costs Direct labour hours Machine hours Required: (a) (b) X (c) K5,124,000 K8,712,000 4,200 5,280 A predetermined overhead absorption rate is established for each production department each year. Actual data for January 2016 included: Department Y X K441,000 340 Department Y K719,000 Z 426 K6,681,600 11,520 Z K561,000 985 Calculate, from the data provided, an appropriate predetermined overhead absorption rate for each production department for 2016. 6 marks Calculate the amount of the over/under absorption of overhead in January in each production department and in total for the factory. Suggest two general causes of overhead under absorption. 11 marks 3 marks