C 4 SECTION A [100 MARKS] Answer ALL the questions in this section. Use the information provided below to answer the following questions: (20 Marks) 1.1 Prepare the Overhead Allocation Statement using traditional costing. (13 marks) 1.2 Calculate the allocation rate (expressed to the nearest cent) for each of the production centres based on machine hours for Machine centres X and Y and direct labour hours for Assembly. (3 marks) 1.3 Calculate the overheads applied to each batch of Product A. (4 marks) INFORMATION Pedro Limited has three production centres (Machine centre X, Machine centre Y and an Assembly centre) and two service centres (Materials procurement and General manufacturing support). The annual overhead costs are as follows: R. Indirect materials: Machine centre X 450 000 Machine centre Y 700 000 Assembly 100 000 Materials procurement 0 General manufacturing support 9 000 Indirect labour Machine centre X 900 000 Machine centre X 900 000 Machine centre Y 810 000 Assembly 990 000 Materials procurement 800 000 General manufacturing support 700 000 Heating and lighting 500 000 Heating and lighting 500 000 Property tax 900 000 Insurance of machinery 150 000 Depreciation of machinery 900 000 Insurance of buildings 250 000 Salaries of works management 720 000 The following information is also provided: Number Area occupied Carrying value of machinery Direct labour Machine of Area occupied Carrying value of machinery of Direct labour hours Machine hours (m2) employees Machine centre X R4 800 000 12 000 360 500 000 1 400 000 Machine centre Y 4 000 000 6 000 240 500 000 600 000 Assembly 500 000 18 000 360 1 000 000 Materials procurement 400 000 18 000 120 300 000 6 000 120 General manufacturing support R10 000 000 60 000 1 200 Machine centre X R4 800 000 Machine centre Y 3 600 000 Assembly 1 200 000 R9 600 000 Secondary allocation: Direct labour hours is used as the basis for the General manufacturing support cost centre and the value of materials issued is used as a basis for the Materials procurement cost centre. Product A is produced in batches of 100. Each unit spends 3 hours in the Machine centre X, 6 hours in Machine centre Y and 6 hours in the Assembly centre