QUESTION 2 DORCAPAT Company Ltd has three production departments, Assembly, Welding and Finishing, and two service departments, Maintenance and Quality Control. The following information is available about overhead costs. Total Assembly Welding Finishing Maintenance Quality Control GHS GHS GHS GHS GHS GHS Indirect labour cost 1,053,000 400,000 270,000 200,000 83,000 100,000 Indirect materials 43,500 10,000 9,000 11,500 6,000 7,000 Building rental 27,000 Building Insurance 60,000 Equipment insurance 40,000 Heating and lighting 18,000 Depreciation 75,000 TOTAL 1,316,500 Additional Information: Total Assembly Welding Finishing Maintenance Quality Control 250,000 200,000 150,000 Cost of plant/equipment (GHS) Floor area (square metres) Kilowatt hours (000s) Direct Labour hours 750,000 1,800 100,000 250 50,000 300 500 400 350 800 250 150 250 50 100 18,000 6,000 7,000 5,000 Indirect labour and indirect material costs have been allocated directly to these five cost centres. The other overhead costs are shared among the cost centres. Depreciation is a charge for the use of items of plant and equipment such as machinery. 1