Question 3 Gerald Limited is an engineering company which uses job costing to attribute costs to individual products made to customer specification. The following is an extract of the budgeted costs for 2020: Department Cost Machining K 1,800,000 Assembly K 750,000 Finishing K 450,000 Stores K 300,000 Maintenance K 240,000 An analysis of the services provided by the service departments to other departments is as follows: Machining Assembly Finishing Stores Maintenance Stores 40% 30% 20% 10% Maintenance 55% 20% 20% 5% Budgeted activity for the year 2020 is: Machining Assembly Finishing Machine hours 150,000 12,000 15,000 Labour hours 30,000 90,000 60,000 Required: (a) Calculate appropriate overhead absorption rates for each production department for the year 2020. [15 marks) (b) A customer has requested a quotation for a job, details of which follow below: Direct Materials K7, 200 Direct labour K4, 500 4 The order will require the following labour and machine hours: Machining department Assembly department Finishing department Machine hours 135 15 12 Labour hours 30 45 60 The company has a target profit margin of 30% on all jobs. Prepare the quotation for the job. [5 marks) Total [20 marks]