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Lassi Productions produces a product that passes through two departments: forming and assembly. The production process depicts that assembly is labour intensive while forming is

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Lassi Productions produces a product that passes through two departments: forming and assembly. The production process depicts that assembly is labour intensive while forming is highly machine intensive. The company also has two service cost centres: stores and maintenance. Based on the nature of the entily, both service departments provide support to each other During the period. the following allocated overheads were recorded Maintenance Allocated Forming Assembly ndirect Material $24.000.000 $29.000.000 Indirect labour $4,000,000 $9,000,000 Stores $6.500.000 $1.500.000 $1,500,000 $1.500.000 Additionally, the management accountant provides the following overhead data that relates to period Tin Budgeted Overheads Heat and lighting Plant and machine insurance Plant and machine depreciation $24,000.00 $9.000.000 $ 4.000.000 $ 7.000.000 $11.000.000 Ront and Rates Power Basis Forming Stores Maintenance Floor area (m2) Plant values Assembly 500 250 125 125 5.000.000 2,500,000 1.000.000 Maintenance hours 1.500.000 1.000 - 2.500 1.500 KWH 5.000 3.750 750 500 250 Number of requisitions Machine hours 200 sa 250.000 Labour hours 50,000 200.000 50.000 The purchasing manager indicates that the average cost of raw material for this products $190 per kilogram, while the HR department listed the average direct labour rale as $40 per hour. The company applies a margin of 25% on each unit cost in arriving at the price of the product. The following per unit data is related to the product: 10 Direct material in kilogram Direct labour hours 10 Machine hours 20 Noter where a tas not given the most suitable basis should be chosen that has a ponosive relationship between those con Mors wil be awarded only for choosing the most suitable basis Required Required: a. Prepare an overhead cost analysis sheet. Note: the analysis should include a total column and the appropriate bases used in a separate column (14 marks) b. Calculate the Oars using the simultaneous equation approach to re-apportion the service department costs. (12 marks) c. Calculate the total cost and selling price of the product. (4 marks)

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