QUESTION 3 Bogale Ltd, is one of the consumer product companies, for which focus groups have been organised by Chikomo (Pty) Ltd. Bogale Ltd has been reviewing its total costs over the last few periods and has established the following: Period Sales units Total cost (R) 1. 600 4 500 2. 1 000 8 200 The company is aware that fixed costs increase by R2 500 when sales exceed 800 units. Variable cost per unit remains the same at all production levels. Bogale Ltd has been provided with the following information for two of their production departments: Department 1 Department 2 Budgeted overheads R120 000 R340 000 Budgeted absorption rate R12 per labour hour R17 per machine hour Your manager is busy compiling his yearly financial report and would like to know whether there was an over/under recovery of overheads in each department. He explained to you that there should be no over/under recovery in Department 1 because actual overheads and budgeted overheads were the same You have collected the following data: con Completion Status: Department 1 Department 2 Budgeted overheads R120 000 R340 000 Budgeted absorption rate R12 per labour hour R17 per machine hour Your manager is busy compiling his yearly financial report and would like to know whether there was an over/under recovery of overheads in each department. He explained to you that there should be no over/under recovery in Department 1 because actual overheads and budgeted overheads were the same. You have collected the following data: Department 1 Department 2 Actual overheads R120 000 R320 000 Actual labour hours worked 11 000 hrs 2 500 hrs Actual machine hours worked 1 500 hrs 18 500 hrs REQUIRED Determine the appropriate over/under recovery of overheads per department using the table below Department 1 R Department 2 R Actual overheads Allocated overheads