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Question 3: A manufacturing company produces a single product. The information about manufacturing this product are provided as follow: Total direct Materials 300,000 Total direct
Question 3: A manufacturing company produces a single product. The information about manufacturing this product are provided as follow: Total direct Materials 300,000 Total direct Labour 100,000 Number of units produced and sold 5,000 units Stores Details for the next year's budgeted overheads are shown below Department B Traced costs Total (E) Indirect wages 7,000 2,250 3,750 Other costs (E) Heat and light 8,100 Machine depreciation 32,000 Canteen 6.000 1,000 Details of each department are as follows: Total Stores 2,000 Floor area square feet Machine- at cost Number of employees Direct labour hours No. of stores requisitions Machine hours 12,000 60,000 100 4,900 5,000 6,000 45,000 50 2,100 3,500 7,073 4,000 15,000 40 2,800 1,500 10 Required: a) Prepare an overhead analysis sheet showing the basis for allocation of the other costs to departments (15 marks) b) If the absorption method is machine hours for department A and labour hours for the department B, calculate an absorption rate for each department. (4 marks) c) Calculate is the total cost of each product manufactured, if 1.5 machine hours are required in department A and 1 labour hour in department B
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