Mandevu Enterprises Ltd (MEL) makes and sells furniture. The company has two production departments: Cutting and Assembly, and two support departments: Stores and Machine Maintenance. MEL uses a traditional absorption costing system to allocate production overheads to products. The following budgeted cost information is available for the month: Required: (a) Explain the terms direct costs and indirect costs, giving examples. (4 marks) (b) Prepare a schedule of the total budgeted overheads for each of the four departments, clearly showing the basis of apportionment. (11 marks) (c) Calculate the total budgeted overheads for each of the production departments after the service departments have been re-apportioned. (d) Compute the budgeted overhead absorption rates for each of the production departments. (4 marks) n. (f) At the end of the period the actual production overhead cost incurred by the Cutting department was K234,480. Actual labour hours worked in that department were 14,100 and actual machine hours recorded were 63,000. Calculate the under or over absorbed production overhead for the Cutting department. ( 2 marks) (g) Describe the following costing systems: (i) Marginal (ii) Absorption costing (4 marks) (h) Explains the effect on profit of using variable (marginal) and absorption costing. (4 marks) (i) Explain TWO advantages and TWO disadvantages of both marginal and absorption costing systems. 8mark