Everest, Lid. is a textile company, which produces two lines of clothing products, outdoor range and skiing range, for a national retailer. It has two production departments (Cutting department and Sewing department) and a service department (Maintenance department). All specific overheads have been allocated to these departments. The remaining general overheads budgeted for the next year are as follows: Total, f Rent and Rates 76,800 Machine Insurance 32,000 Canteen Cost 19,200 Total 128,000 All departments are located in the same premise, the details of which, together with further additional information are provided below: Cutting Sewing Maintenance Total Allocated overheads: Specific to each department, f 20,080 30,000 12, 160 62,240 Floor area occupied, square metres 3,840 4,320 1,440 9,600 Machinery value, f 48,000 80,000 32,000 160,000 Number of employees 18 36 6 60 Budgeted direct labour hours 26,400 40,800 67,200 Labour rates per hour 5.80 6.00 6.50ls:ll..ll:5!'.'|llUll I LUIILIIIU'HLI PART 1: OVERHEAD ALLOCATION 3) Calculate the total overhead costs budgeted for each department. In each case, briey explain which basis you have chosen to use to apportion the general overheads between departments and why. (3 marks) b) Based on your answer to part (a), apportion the overhead costs from the service cost center to the product cost centers. Select the basis which would allow the most appropn'ate cost allocation. Calculate the total overhead cost for product cost centers. [5 marks}