Question 1 The production process of Maxi Ltd is classified into three production departments i.e. Machine, Assembly and Testing. In addition, there are two service departments, Store and Maintenance. The relevant information for the period ended 30 June 2020 is as follows: Overhead cost for all four departments are as follows: Rent and rates 10,000 Power 1,250 Light and heat 5,350 Repairs and maintenance: Machine 1.700 Assembly 1.400 Testing 1,350 Store 200 Maintenance 300 4,950 Departmental expenses: Machine Assembly Testing Store Maintenance 1,800 1,500 1,400 1,000 1,200 6,900 Depreciation: Plant and machinery Fixtures and fittings 15,000 1,000 1.000 2,000 Insurance: Plant and machinery Buildings Indirect labour: Machine Assembly Testing Store Maintenance 5,000 4,500 3,000 2,000 4,500 19,000 66,450 In addition, the following information is available for each department: Item Machines Assembly Testing Store Maintenance Total Labour hours 23,000 5,000 2,000 30,000 worked Machine 28,000 1,000 1,000 30,000 hours worked Floor space 4,000 3,000 1,500 500 1,000 10,000 (sq. ft) Horse power 80 20 10 10 120 Value of plant 120,000 40,000 30,000 10,000 200,000 and 5,000 machinery ($) Fixtures and 500 2,000 1,000 500 1,000 fittings (3) Service department costs are apportioned according to the following: Store % Machine 40 Assembly 30 Testing 20 Store Maintenance 10 Maintenance 50 30 15 5 Required: (a) Allocate and apportion production overhead costs over the five departments. (b) Reapportion the service departments' costs over production departments. (C) Calculate departmental overhead absorption rate for each production department by using labour hours or machine hours depending whichever is greater. (d) Find the overhead cost of a job which spends 8 hours in the Machines department. 5 hours in Assembly department, and 4 labour hours in the Testing department