Question 2 Broxton Ltd. makes a specialised chemical, X14 in barrels at its factory. The factory has two departments: the processing department and the finishing department. Because of the technology involved, Broxton apportions both the budgeted and the actual total factory fixed overheads between the two departments on the basis of budgeted machine hours.

The standard absorption cost per barrel of X14 in the processing department, and the budgeted production for the five weeks ended May 31, 2020.

Processing department: standard cost per barrel of X14

Input	Quantity	Standard price/rate	Cost
			$
Material	10 litres	$60 per litre	600
Labour	8 labour hours	$8 per labour hour	64
Fixed overheads	16 machine hours	$20 per machine hour	320
Standard absorption cost per barrel			984

Budgeted production 5 weeks ending May 31,2020

The information for the five weeks ended May 31,2020 are as folows:

Total factory budgeted and actual data

Factory budgeted machine hours	1,152 machine hours
Factory budgeted fixed overheads	$23,040
Factory actual fixed overheads	$26,000

Budgeted and actual factory fixed overheads are apportioned between the processing and finishing departments on the basis of budgeted machine hours.

Processing department actual data

Actual	Total cost
Materials @$58.50 per litre	$23,985
Labour (328 hours)	$2,788
Actual production output	40 barrels
Actual machine hours worked	656 hours

As the Management Accountant of the company you are required to prepare standard costing reconciliation statements