Question 3 (35 marks) Tal Manufacturing has two production departments, A and B. The following budgeted overheads are expected to be incurred next quarter: $ 11,790 8,240 36,900 12,000 23,050 Indirect materials Department A Department B Factory Rent Machinery insurance Factory power The following information is also available: Department A Power usage (%) 80% Floor area (m) 16,400 Machine value $60,200 Department B 20% 4,100 $25,800 Department A is machine intensive while Department B is largely labour-based. Information on machine and labour hours for the two production departments is shown below: Department A Department B Direct labour hours 7,600 27,340 Machine hours 33,800 8,100 REQUIRED: (i) Reproduce the table on the next page and calculate the overhead absorption rate in each department by completing the table. You are required to use the most appropriate basis to apportion the relevant overhead costs. (Please show detailed workings and round up your answers to two decimal places.) (30 marks) (ii) Tal's best selling product is Product 316. Cost information to produce one unit of Product 316 is as follows: Direct materials Direct labour 3 kg at $5.50 per kg 7 hours at S6 per hour Time Spent in: Department A Department B 1.5 machine hours 5 direct labour hours Find the cost per unit of Product 316 (Please show detailed workings and express your answers in two decimal places.) (5 marks) Solutions: (0) Basis Total s Production Department A B s S Allocated Apportionment Total Activity Base Overhead Absorption Rate