Question 2 (14 marks) Perry Company has two support departments (HR and Maintenance department) and two departments that produce products directly (Cutting and Assembly department). The usage of the two support departments' output in the year just ended were as follows: Support Departments Production Departments HR Maintenance Cutting Assembly Budgeted overhead $180,000 $240,000 $600,000 $1,000,000 Maintenance hours 1,000 500 2,200 1,800 Number of 12 18 40 60 employees Direct labour hours 15,000 3,000 Machine hours 4,000 20,000 The budgeted overhead cost of the HR department is allocated based on number of employees and the Maintenance department's overhead cost is allocated based on maintenance hours. The cutting department uses direct labour hours to assign overhead costs to products and the assembly department uses machine hours. The product Perry Company produces requires 4 labour hours per unit in the cutting department and 2 machine hours per unit in the assembly department. Prime cost for the product is $250 per unit and Perry Company prices its product at full production cost plus 350% mark-up as profit margin. Required: 1. Using the step-down/sequential method, allocate the budgeted overhead costs of the HR and Maintenance departments (allocate Maintenance department first) to the cutting and assembly department and calculate the total overhead cost of the cutting and assembly department. 2. Calculate the predetermined overhead application rate of the cutting and assembly department (include decimal places). 3. Calculate the per unit price of the product Perry Company produces (show detailed calculations and include decimal places). (7 +4+3 = 14 marks) Start your answer here