Ndola Batteries Ltd$,$ was recently established after so many government pronouncements on the introduction of electrical vehicles. A government official was quoted as saying that all public service departments will be required to procure the electrical vehicles starting next year. NBL commenced operations immediately after sourcing finance from a bank. It will produce both the batteries and car charging accessories.

The company has two production departments $,$ Mixing and Assembly, and two service departments, Stores and Maintenance. NBL has adopted absorption costing system. You are the accountant at NBL$,$ and the cost department has collated the following information for November $2023$:

Total Mixing Assembly Stores Maintenance

Direct costs: K$1,000,000$ K$400,000$ K$320,000$ K$100,000$ K$180,000$

Indirect costs:

Indirect materials K$1,000,000$

Rent K$750,000$

Electricity K$500,000$

Machine depreciation K$250,000$

Indirect labour K$826,000$

Additional budgeted information:

Total Mixing Assembly Stores Maintenance

Number of Stores requisitions $10,0003,5004,0001,0001,500$

Number of staff $3191516$

Area square metres $2,0005001,000250250$

Machine value $($K$)500,000225,000175,00045,00055,000$

Indirect labour hours $24060404892$

Kilo watt hours consumed $4131382252525$

Direct labour hours $349159190--$

Maintenance hours $(\%)3070--$

Required:

$($a$)$ Explain the three stages of overheads absorption$.(6$ marks$)$

$($b$)$ Using the step$-$down method overhead reapportionment, determine the overhead absorption rates for the production departments. $(16$ marks$)$

$($c$)$ Calculate the blanket overhead absorption rate. $(4$ marks