QUESTION 2: PART 2 - Alex Ltd The following information has been taken from the budget for the forthcoming financial year: Direct materials cost 120,000 Direct materials usage 15,000 kg Direct labour cost 168,000 Direct labour time 12,000 hours Machine hours 8,000 hours Supervisors' salaries 54,000 Depreciation of machinery 46,000 Rent of factory 18,000 Power for machines 9,300 8,000 Machine maintenance Indirect materials 5,700 Heat and light 8,500 All direct labour is paid the same hourly rate. Currently, Alex Ltd has Project A which has the following cost: Raw materials 850 kg Direct labour hours 320 hours Machine hours 500 hours Required: 1. Calculate overhead absorption rate (OAR) using machine hour basis only (3 marks). 2. Prepare full costing for Project A using overhead rate under machine hour basis of allocation (9 marks).