QUESTION 1 Fruity Juices produce pure fruit juices. They have two processing departments, preparation and mixing, and one service department, maintenance. The following information is available for the purpose of departmentalising the manufacturing overheads. Preparation Mixing Maintenance Direct labour hours 5 000 hrs 5 000 hrs 1 000 hrs Machine hours 6 250 hrs 8 400 hrs 1 200 hrs R75 000 R100 000 R25 000 12 3 Value of machinery Number of employees Floor area Material usage 6 8 000 m2 5 000 m2 R5 690 R6 875 2 000 m2 R1 050 The following amounts represent the budgeted manufacturing overheads: Insurance R Buildings 15 000 Machinery 20 000 Depreciation of machinery 50 000 Maintenance of buildings 23 250 Specialised clothing 13 650 Cooling of factory buildings 11 250 Indirect materials Preparation department 3 050 Mixing department 2 980 Maintenance department 5 625 Direct labour hours are used as a basis for the secondary allocation of overheads. You are required to: (19) (a) Prepare an overhead allocation statement (b) Calculate the overhead allocation rate for each of the process departments based on machine hours. (1)