lope Ltd is a manufacturing firm with three $[3]$ production departments: L$,$ M and $N$ and two $[2]$

service departments: Stores and Maintenance.

For the year ending $30$ September $2023,$ budgeted costs are as follows:

Department

L$.$

M

$N$

i$.$ Hope Ltd absorbs production overheads into product costs on an hourly basis.

ii$.$ Hope Ltd needs to provide a quote for Job # $1$Q$007,$ and company policy is to add forty

$40\%$ of production costs to jobs to arrive at a quotation price.

iii. Administrative expenses for Job # IQ$007$ are $50\%$ of Prime cost.

iv$.$ Data for Job# IQ$007$:

Required

a$.$ Calculate the overhead rate for each production department using the most appropriate

basis of absorption

$(6$ marks$)$

b$.$ Prepare the Job costing Sheet for Job# IQ$007$ showing clearly:

Prime cost

$(6$ marks$)$

Total production overhead

$(6$ marks$)$

Total production cost

$(1$ mark$)$

Total cost

$(2\mathrm{.}5$ marks$)$

Quotation price

$(2\mathrm{.}5$ marks$)$

c$.$ Explain two differences between job and process costing

$(6$ marks$)$