Candy plc manufactures 2 products through two production centres: the Cutting Department and the Assembling Department. It also has two service cost centres: a canteen and a Maintenance Department. Each product is processed through the Cutting Department first and then passed onto the Assembling Department. The following table shows the input factors for each product. Production (units) Direct materials ( per unit) Direct labour - Cutting ( per unit) - Assembling ( per unit) Machine hours (hour per unit) Product X Product Y 3500 6500 5 8 16 9 The following shows the planned overheads: Directly Allocated overheads, 12 263 Cutting Assembling Canteen Maintenance Total 250,000 175,000 23,890 35,420 484,310 Rent, heat and light, 60,000 Depreciation and insurance of 100,000 equipment, Gross amount of equipment, 1,550,000 1,150,000 0 300,000 Number of employees 40 25 10 15 Floor space occupied, sq metres 4,000 1,500 1,200 1300 Indirect production overheads such as rent, heat and light, and depreciation and insurance are allocated based on the floor space occupied by and the number of employees in each of the departments. The Maintenance Department normally spends 75% of its time servicing the Cutting Department. The remaining time is spent on servicing the Assembling Department. 80 per cent of the machine time is carried in the Cutting Department while the remaining time is carried in the Assembling Department. (a) Calculate the following planned overhead absorption rates: (i) A machine hour rate for the Cutting Department. (ii) A rate expressed as a direct labour cost for the Assembling Department. (b) What is the full cost per unit of Product X? (10 marks) (4 marks) (c) With reference to parts (a) and (b) above, evaluate the usefulness and limitations using absorption costing in providing relevant management accounting for decision making. (6 marks)