A furniture making business manufactures quality furniture to customers orders. It has three production departments and two service departments. Budgeted overhead costs for the coming year are as follows:

Total () Rent and rates 12 800

Machine insurance 6 000

Telephone charges 3 200

Depreciation 18 000

Production supervisors salaries 24 000

Heating and lighting 6 400

Total 70 400

The three production departments A, B and C, and the two service departments X and Y, are housed in the new premises, the details of which, together with other statistics and information, are given as follows:

A B C X Y

Floor area occupied (sq. metres) 3000 1800 600 600 400

Machine value (000) 24 10 8 4 2

Direct labour hrs budgeted 3200 1800 1000 ------- ------------

Labour rates per hour 3.80 3.50 3.40 3.00 3.00

Allocated overheads Specific to each

Department (000) 2.8 1.7 1.2 0.8 0.6

Service department Xs costs apportioned 50% 25% 25% ------ -------

Service department Ys costs apportioned 20% 30% 50% ------- ---------

Required:

(a) Prepare a statement showing the overhead cost budgeted for each department, showing the basis of apportionment used. Also calculate suitable overhead absorption rates.

(b) Two pieces of furniture are to be manufactured for customers. Direct costs are as follows:

Job P Job Q

Direct material 154 108

Direct labour 20 hours Dept A 16 hours Dept A

12 hours Dept B 10 hours Dept B

10 hours Dept C 14 hours Dept C

Calculate the total costs of each job.