Flowers Limited had three production departments, X, Y and Z, and two service departments, Stores and General Services. For the forth coming period, the total budgeted overhead costs are as follows:

Allocated costs (N$000)
Department	Indirect material	Indirect labour
X	20	12
Y	10	12
Z	10	8
Stores	6	8
General Services	3	2

Heat and light	21
Rent	33
Plant insurance	21
Building insurance	12
Canteen	18

The following information is also available:

Department	X	Y	Z	Stores	General Services
labour rate per hour (N$)	4	5	6	-	-
Total direct labour hours (000)	12	15	12
Employees	80	50	40	20	10
Area (000m2 )	8	7	6	6	3
Plant valuation (N$000)	100	120	100	40	60
Material requisitions (000)	1.2	1	1.8		1

The company absorbs its production overhead by using direct labour rates.

You are required to:

a) Prepare an overhead analysis for the forthcoming period, showing clearly the bases of apportionment used. (Work to the nearest N$).

b) Calculate the direct labour hour rate for overhead absorption for each of the three production departments. (Work to two decimal places).

c) State one alternative to an hourly rate for overhead absorption, and state why hourly rates are considered to be the most suitable method for overhead absorption.

d) The company has been asked to quote a selling price for a job, the specifications of which are:

Direct materials (N$) 169.93

Direct labour:

Dept X 4 hours

Dept Y 6 hours

Dept Z 3 hours

The company requires a profit of 20% of selling price on this job.

You are required to:

Calculate the selling price for the job based on the above information and the overhead rates calculated in (b) above.