P.10.1 Atlas Engineering Limited accepts a variety of jobs which require both manual and machine operations. The budgeted profit and loss account for the current period is as follows: (in lakh) Sales 75 Cost: Direct materials 10 Direct labour s Prime cost Production overheads Production cost Administrative, selling and distribution overheads 15 Profit Other budgeted data: Labour-hours for the period 25,000 Machine-hours for the period 15,000 Number of jobs for the period 300 An enquiry has been received recently from a customer and the production department has prepared the following estimate of the prime cost required for the job. 30 45 60 15 y42 1 80 Direct material 2,500 Direct labour 2,000 Prime cost 4,500 Labour-hours required Machine-hours required 50 You are required to: (a) Calculate by different methods, six overhead absorption rates for absorption of production overhead and comment on the suitability of each. (b) Calculate the production overhead cost of the order based on each of the above rates. (c) Give your recommendation to the company