Question 3 A factory manufactures garden huts. The production process is classified into two production departments, the assembly and joinery. There are one service department, the canteen. The relevant forecast information for the year ahead is as follows. Indirect costs for all three departments in total: Total Indirect labour 68,000 Indirect material 65,000 Heating and lighting 36,000 Rent and rates 40,000 Depreciation of machinery 54,000 Supervision 46,000 Power 38,000 Grand total 347,000 The following information is available for each department: Total Assembly Joinery Canteen Floor space (sq metres) 50,000 20,000 24,000 6,000 Book value of machinery (RM) 560,000 300,000 240,000 20,000 Number of employees 150 80 60 10 Kilowatt hours of power 18,000 9,000 8,000 1 ,ooo Direct materials (RM) 100,000 50,000 Direct labour (RM) 50,000 42,000 Maintenance hours 8,000 6,000 Labour hours 12,640 8,400 The service department overhead costs are re-apportioned by number of employees. Required: a) Apportion production overhead costs over the Assembly, Joinery and Canteen departments using suitable basis for each department. b) Apportion service department costs over production departments. c) For each production department, calculate an overhead rate, based on labour hours, which may be used to absorb production overhead cost into jobs. d) Find the overhead cost of a job which spends 4 labour hours in the Assembly Department and 5 labour hours in the Joinery Department.