Eco Bhd$.$ makes a range of products with budgeted overhead costs incurred in production

departments, $P$ and $Q,$ and one service department, $C$ for the year ending $31$ December $2022.$

The followings are costs incurred directly by each of the departments:

The balances of the budgeted overhead costs are to be apportioned as follows:

Additional information given are as follows:

Department C$\text{'}$s cost is to be reapportioned to the production departments based on the

numbers of requisition by departments $P$ and $Q.$

You are required to:

$($a$)$ Prepare a statement showing the overhead cost budgeted for each of the

departments, showing the basis of apportionment used.

$($b$)$ Calculate the profit and selling price of Job No$.80,$ based on the following

information:

Direct material $,$ RM$360$

Overhead absorption rate for Dept. P RM$1\mathrm{.}5$ per machine hour

Overhead absorption rate for Dept. Q RM$2\mathrm{.}0$ per machine hour

Machine hours used in Dept. P $120$ hours

Machine hours used in Dept. Q $160$ hours

Selling price is quoted at $25\%$ margin

$($c$)$ Explain the term "overhead absorption$".$ State two $(2)$ methods by which

overheads can be absorbed into cost units.