Appendix

Bucks has two production departments and two service departments. Production overheads are expected to be as follows:

Rent and rates	25,000
Lighting and heating	15,000
Depreciation of machinery	20,000
Insurance of machinery	9,500
Supervisors salary	25,000
Buildings insurance	12,500

The following information is also available:

	Production departments		Service departments
	Machining	Finishing	Stores	Maintenance
Floor area (square metres)	350	250	200	100
Number of production staff	15	10	-	-
Value of machinery (000)	120	115	17	18

Each of the production staff is expected to work 38 hours per week for 48 weeks.

Apportionment of service centres:

	Machining	Finishing
Stores	60%	40%
Maintenance	70%	30%

Additional information: the production manager has provided other costing information: direct material cost is 9.56, and 1 hour of direct labour hour is required per unit in both departments and workers are paid at 12.00 per hour. The company absorbed overhead based on labour hour.

Calculate the unit cost of production under the conventional costing method using the appendix data.