b. Calculate the amount of overhead to be charged to each of the production departments using the reciprocal or repeated distribution method of transferring costs from service cost centres to production cost centres. (9)

c. Calculate the amount of under or over absorption of overhead for each of the production departments. (6)

d. Explain what is meant by under or over absorption of fixed overhead and state the reasons as why this may occur. (6)

QUESTION 1 [25 MARKS) Sugar Mummy Ltd has two production departments, Machining and Assembly and two service departments. Tooling and Maintenance. The budgeted activity levels for April 2021 were thus: Machining 400 hours NS16 000 Assembly 2400 hours N$9 600 The service departments are apportioned thus: Tooling 70% to Machining 20% to Assembly 10% to Maintenance Maintenance 50% to Machining 30% to Assembly 20% to Tooling During April 2021 the actual results were: Machining 420 hours N$12000 Assembly 2300 hours N$8 000 Tooling NSS 000 Maintenance N$3000 Required a Calculate the budgeted overhead absorption rate per hour for each of the production departments (4) 2