Q.2 Overhead Costing King and Brothers is a manufacturing firm with five (5) departments. A, B, and C are production departments, while X and Y are service departments. The following data have been availed. Producing departments Service department A B C X Y Direct wages '000' shs 70,000 60,000 50,000 10,000 10,000 Direct materials '000' shs 30,000 25,000 20,000 15,000 10,000 Employees No. 400 300 300 100 100 Electricity kwh 8,000 6,000 6,000 2,000 3,000 Light points No. 10 15 15 5 5 Assets values '000' shs 50,000 30,000 20,000 10,000 10,000 Area occupied SQ. YDS 800 600 600 200 200 Particulars Labour welfare Depreciation Heating Rent Stores overhead Motive power The overheads were as under; Shs (000) 30,000 60,000 12,000 6,000 4,000 15,000 2,000 Electric lighting Required a) Using a primary overhead analysis sheet, show how the overheads in King and Brothers can be apportioned between the five departments sighting relevant bases for the apportionment. (12 marks) b) For each allocation base you have selected, explain reasons suggesting why you have preferred such an allocation base? (07 marks) c) Explain how predetermined overhead absorption rates can aid the costing of products and services in King and Brothers. (06 marks) Total 25 marks