B. Smithson Limited, a business that provides shoe repair service to its customers has overheads of 2,000 each month. Each month 500 direct labour hours are worked and charged to units of output (repairs carried out by the business). A particular repair undertaken by the business used direct materials costing 5. Direct labour worked on the repair was 2 hours and the wage is 10 per hour. Overheads are charged to jobs on a direct labour hour basis. I. What is the full cost of the repair? II. Marks: 7 Can you think of reasons why direct labour hours is regarded as the most logical basis for sharing overheads between cost units? Marks: 3