Maya Ltd is in business with three departments: production departments Machining and Assembly and a service department Administration. The following information is

available:

Raw materials

Raw materials are purchased to order and will be charged to the customer at cost

plus $20\%$

Labour

Machining employees are paid $8\mathrm{.}00$ per hour.

Assembly employees are paid $10\mathrm{.}00$ per hour.

$$ Machining employees work $45$ hours per week for $50$ weeks per year. $80\%$ of all

employee working hours are charged directly to customer repair jobs. There are $5$ employees in machining department

$$ Assembly employees work $48$ hours per week for $50$ weeks per year. $75\%$ of all

employee working hours are charged directly to customer repair jobs. There are $3$ employees in assembly department

Overheads

Allocated overheads:

$$

Machining

Assembly

Administration $78000$

$53000$

$24000$

Other overheads:

$$

Rent and rates

Depreciation of equipment

Insurance

Management salaries $40000$

$56000$

$14000$

$45000$

Additional information

Machining Assembly Administration

Floor area $($sq m$)600300100$

Employees $($number$)531$

Equipment value $()2000010000020000$

The total overhead for Administration is reallocated: $60\%$ Machining, $40\%$ Assembly.

Required

$($a$)$ Calculate the total overhead cost $($including the reallocation of Administration$),$ of the:

$$ Machining department

$$ Assembly department

$($b$)$ Calculate the overhead recovery rates per labour hour for the:

$($i$)$ Machining department

$($ii$)$ Assembly department

A customer has requested a quotation for the repair of his car. Maya Ltd will purchase the raw materials for $400.$ The repair will take $20$ hours in the Machining and $25$ hours in the Assembly. Deluxe Ltd will include an additional charge of $150$ on the total cost for profit.

Required

$($c$)$ Prepare the quotation for the customer.