Question 1 (MARKS: 17) MARKS 7.5 Windhoek (Pty) Ltd manufactures a range of products in three departments, namely: A, B and C. The three production departments are supported by Service Department X. It is the company's policy to budget for its overhead costs under each department, and this is done on a quarterly basis. As part of its quarterly budgeting process, the following overhead costs have been primarily allocated to the four departments for the third quarter of 2020: REQUIRED: 1.1. For the third quarter of 2020, determine the budgeted pre-determined overhead absorption rate for each of the three production departments. 1.2 Identify four steps that Windhoek (Pty) should follow in valuing its closing inventory of products manufactured where the actual overhead costs incurred is more than the budgeted overhead costs. 1.3 Briefly discuss how the production department overhead costs should be allocated to products manufactured by the company TOTAL MARKS FOR QUESTION 1 5 4.5 17 Departments Production Department A Production Department B Production Department C Service Department X N$ 1 200 000 1 700 000 680 000 420 000 A further NS 880 000 in overhead costs have been budgeted for the same quarter, and are to be allocated as follows: Departments Production Department A Production Department B Production Department C Service Department X Percentages 40% 30% 20% ? % The overhead costs under Service Department X are to be apportioned to the production departments as follows: Departments Production Department A Production Department B Production Department Percentages ? % 40% 35% Additional information: Department A is labour intensive and has a staff complement of 80 employees who are directly involved in the production process. Each employee works a 40 hour week. Department B is capital intensive. There are 100 Machines in this department which operate an average of 120 hours per month each. Department C is an assembly department. Costs are allocated on the basis of units assembled. The company has budgeted to assemble 12 000 units in the third quarter. Assume that there are four working weeks in each budgeted month