A factory with three departments uses a single production overhead absorption rate, expressed as a percentage of direct wages cost. It has been suggested that departmental overhead absorption rates would result in more accurate job costs. Set out below are budgeted and actual data for the previous period, together with information relating to job no. 650. Production overheads Direct Direct Machine hours wages labour hours Budget DepartmentA NS 120 000 30 000 NS 25 000 100 000 25 000 150 000 10 000 40 000 50 000 25 000 85 000 10000 75 000 225 000 Total: Actual 50 000 Department A B NS 30 000 12 000 45 000 NS 130 000 80 000 14 000 45 000 30 000 87 000 28 000 | Total: 30 000 140 000 80 000 238 000 59 000 During this period job no. 650 incurred the actual costs and actual times in the departments as show below: Direct Direct Direct Machine Material labour wages N$ 120 NS A B. C. hours 100 60 10 hours 20 40 10 Department 40 10 60 10 It is company policy that one-third of total cost is added to production cost to arrive at gross profit. Required: 2.1 Calculate the predetermined overhead rate (POR) using the current system Mark Using the POR obtained in 1,1 above, calculate the production overheads 22 charged to job no 650, and state the production cost and expected gross profit on this job. 5 Compute departmental overhead absorption rates, using machine hours as 2.3 basis for department A, and labour hours as basis for department B and C. Use the departmental overhead absorption rates and calculate the 2.4 production overheads charged to job no. 657. 2 Total 15 ololo