(c) If the firm quotes prices to customers that reflect a required profit of 25% on selling price, calculate the quoted selling price for each job. (d) If material costs are a significant part of the total costs in a manufacturing company, describe a system of material control that might be used in order to effectively control costs, paying particular attention to stock control aspect. QUESTION TWO A Company produces several products, which pass through the two-production departments in its factory. These two departments are concerned with Filling and Sealing operations. There are two other service departments, maintenance and canteen, in the factory. Predetermined overhead absorption rates, based on direct labour hours, are established for the two production departments. The budgeted expenditure for these departments for the period just ended, including the apportionment of service department overheads, was $ 110 040 for filling, and $ 53 300 for sealing Budgeted direct labour hours were 13 100 for filling, and 10 250 for sealing. Service department overheads are apportioned to other departments as follows: Maintenance Filling Sealing 2798 Canteen 396 Canteen Filling 609% Sealing 3296 Maintenance 896 During the period just ended, actual overhead costs and activity were as follows: (5) Direct Labour Hours Consumed Filling 74 260 12 820 Sealing 38 115 10 075 Maintenance 25 050 Canteen 24 375 REQUIRED: (a) Calculate the overheads absorbed in the period and the extent of the under over absorption in each of the two production departments. (b) State, and critically assess, the objectives of overhead apportionment and absorption in absorption costing. QUESTION THREE (a) Critically examine the arguments put forward for the use of absorption and marginal costing systems respectively. (b) The following information is available for a firm producing and selling a single product: $' 000 Budgeted costs (at normal of activity) (1) Direct Materials and labour 264 Variable production Overheads 48