Q2. Marshal Company operates with two production centres and three service centres. Costs have been allocated and apportioned to these centres as follows: P1 Production Centres 3,000 P2 5,000 Service Centres S1 S2 S3 $500 $700 $900 Information regarding how much work the service centres undertake for each other and for the production centres is as follows: Production Centres Service Centres P1 P2 S1 S2 S3 By S1 40% 50% - 10% By S2 50% 30% 10% 10% By S3 60% 40% Information concerning production requirements in the two production centres is as follows: Units produced Machine hours Labour hours P1 P2 1,800 units 2,300 units 3,500 hours 4,900 hours 2,400 hours 6,500 hours Required: (a) Using the reciprocal method calculate the total overheads in production centres P1 & P2 after reapportionment of the service centre costs. (4 marks) (b) Using the most appropriate basis determine the overhead absorption rate for production centre P1. Briefly explain the reason for your chosen absorption basis. (1 mark) (Total marks 5)