Question 4 MST Ltd is involved in the manufacture of stainless steel products. The following cost and resource usage data has been compiled for the current year All direct labour is paid at the same hourly rate. The Sales Director has received a request to manufacture three large storage tanks, which will require materials and components costing 6740,000 . it will take 43,500 labour hours to complete the order, and will require the use of machinery for 37,000 hours in the process. Required: (a) Using direct labour hours as a basis for absorbing overhead costs, calculate the selling price to be charged for the order including a mark-up of 15% on cost. (30%) (b) If the company applied machine hours as an alternative method of absorbing overheads, calculate the job cost and sales price under this approach. (15\%) (c) Suppose the company decided introduce more automation in its business such that direct labour cost reduced to 2,800,000 (140,000 direct labour hours) and Depreciation of Machinery increased to 265,000 and Machine hours increased to 150,000 what would be the new absorption rates on a direct labour and a machine hour basis and the revised job prices. (30%) (d) Discuss briefly the process steps by which indirect costs (overheads) are allocated to output/activity in large scale multi-product/service organisations. (25\%)