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The manger has heard of activity-based costing and provides more detailed information for the overhead cost: Activity Materials handling Machining Power Cost Driver Direct-materials cost Set-ups Kilowatt-hours Majid Telecommunication produces Telephones, Mobiles and Pagers in three production departments A, B and C. Direct costs and cost driver activity for each department are as follows: Production Department A B Total Direct material cost $40,000 $40,000 $10,000 $90,000 Kilowatt Hours 8,000 20,000 2,000 30,000 No of machine set-ups 2 4 2 8 Machine hours 2000 3000 1000 6000 During the period the manufacture of pagers required: Department A 1000 hours Department C 1000 hours Required: a. Compute the total indirect manufacturing cost allocated to Production Department A, B and C. (6 marks) b. Compute the overhead absorption rate per machine hour for each department. (3 marks) c. Calculate the total cost of manufacturing the pagers. (4 marks) Majid Telecommunication produces Telephones, Mobiles and Pagers. You are given the following information for a 3-month period for Majid Telecommunications: Part A The details of indirect manufacturing overheads during the period are: Materials handling $18,000 Machining 12,000 Power 30,000 Total indirect manufacturing cost $60,000 Total Machine Hours worked 6000 The cost information for the production of pagers during the period is as follows: Direct Materials $ 5000 Direct Labour $ 15000 The production required 2000 machine hours Required: a. Calculate the overhead manufacturing rate per hour. (2 Marks) b. Calculate the total cost of Manufacturing the pagers. (5 marks) Part B The manger has heard of activity-based costing and provides more detailed information for the overhead cost: Activity Cost Driver Materials handling Direct-materials cost Machining Set-ups Power Kilowatt-hours Majid Telecommunication produces Telephones, Mobiles and Pagers in three production departments A, B and C. Direct costs and cost driver activity for each department are as follows: A B Total Production Department Direct material cost $40,000 $40,000 $10,000 $90,000 Kilowatt Hours 8,000 20,000 2,000 30,000 No of machine set-ups 2 4 2 8 Machine hours 2000 3000 1000 6000 During the period the manufacture of pagers required: Department A 1000 hours Department C 1000 hours Required: a. Compute the total indirect manufacturing cost allocated to Production Department A, B and C. (6 marks) b. Compute the overhead absorption rate per machine hour for each department. (3 marks) c. Calculate the total cost of manufacturing the pagers. (4 marks) d. Explain the difference in cost of manufacturing pagers in Part and and Part B. (5 amrks)