An organization has budgeted for the following production overheads for its production and service cost centres for the coming year: Cost centre Machining 180 000 Assembly 160 000 Paint shop 130 000 Engineering shop 84 000 Stores 52 000 Canteen 75 000 The product passes through the machining, assembly and paint shop cost centres and the following data relates to the cost centres:

Machining Assembly Paint Engineering Stores Shop shop

No. of employees 81 51 39 30 24 Engineering Shop-service 18 000 12 000 10 000 Stores (orders) 180 135 90 45 The following budgeted data relates to the production cost centres: Machining Assembly Paint shop Machine hours 9 200 8 100 6 600 Labor hours 8 300 11 250 9 000 Labor cost 40 000 88 000 45 000 Required: (a) Apportion the production overhead costs of the service cost centres to the production cost centres and determine predetermined overhead absorption rates for the 3 production cost centres on the following basis:

Machining - Machine hours. Assembly - Labour hours. Paint shop - Labour costs. (15 marks)