QUESTION $3$

HMS limited has commenced the preparation of its fixed production overhead cost budget

for year $2$ and has identified the following costs:

The stores and maintenance departments are production service departments. An

analysis of services they provide indicates that their costs should be apportioned as

follows:

You are required to determine the production costs, after apportioning the service

department costs $($to the nearest K$500).$

$(20$ marks$)$