QUESTION 3 (5 Marks) Lennox Company uses a job costing system. The company uses predetermined overhead rates in applying manufacturing overhead costs to individual jobs. The predetermined overhead rate in Department A is based on machine-hours, and the rate in Department B is based on direct labour cost. At the beginning of 2018, the company's management has made the following estimates for the year: Department A Department B Direct labour-hours 15,000 30,000 Machine-hours 12,000 50,000 Direct labour cost $80,000 $172,000 Manufacturing overhead 162,500 215,000 Job 145 was initiated into production on August 1 and completed on September 15. The company's cost records show the following information on the job: Department A Department B Direct labour-hours 22 40 Machine-hours 80 20 $450 $250 Direct material used Direct labour cost 120 180 REQUIRED A. Calculate the predetermined overhead rates that should be used during 2014 in Department A and B. (1 Marks) B. Calculate the total overhead cost applied to job 145. (1 Marks) C. What would be the total cost of job 145? If the job contained 10 units, what would be the cost per unit? (1 Marks) D. What factors should be considered in selecting a base to be used in calculating the overhead absorption or recovery rates? Discuss. Your discussion should be supported by readings and research. (2 Marks)