1. A manufacturer produces two types of luggage: suitcases and handbags. Both products are manufactured in two departments machining and assembly. There is a canteen to provide meals for the workforce. The following information has been provided to calculate the overhead costs of both products.

	Suitcase	Handbag
Materials	23	16
Machine hours per item (machining department)	1	0.2
Direct labour hours per item (assembly department) (Labour costs of 9 per hour)	0.4	0.5
Production number of items per annum	20,000	15,000

	Machining	Assembly	Canteen
Total estimated annual overhead cost	84,000	36,000	30,000
Number of employees	16	8	4

1. Reapportion the canteen costs to the machine and assembly departments to the nearest
2. Calculate an OAR per machine rate for the machining department
3. Calculate an OAR per labour hour for the assembly department
4. Using the figures in (b) and (c) calculate the cost of a suitcase
5. Using the figures in (b) and (c) calculate the cost of a handbag