Question 1 Glow Limited is a manufacturing company. The company has three production departments (A, B and C) and one service department D. The overheads and other relevant information for the company are as follows: Indirect material 32,000 Rent 216,000 Heat and light 24,000 Machinery power 16,200 Depreciation 100,000 Total overhead 388,200 The following information about each department is available: Department Department Department C B Department D Floor space occupied (sq. ft) 7,500 10,000 5,000 1,500 Machine hours 3,500 5,500 1,800 Value of machinery (000) 540 200 140 120 Direct labour rate 12 12 10 Direct labour (hours) 12,000 15,000 3,000 Direct material (kilograms) 15,000 30,000 5,000 The cost of the service department (Department D) is absorbed based on the number of labour hours in each production department. Required: 1. Prepare a statement showing the overhead cost budgeted for each department (Department A, B, C and D) and the basis of apportionment used. (30%) 2. Calculate the overhead absorption rate for each production department. Production overhead costs are absorbed using direct labour hours. (15%) 3. The company has received an order from a customer. The required labour hours for this job are as follows: Department Department Department A B Direct material cost 300 250 120 Direct labour hours 20 4 5 Calculate the selling price for the job if the company requires a 20% profit margin. (5%)