Question Four a} Dene blanket overhead rates and discuss their use in management accounting. You should also consider the limitations of blanket overhead rates in your discussion. (5 marks) b} Examine the purpose of departmental overhead rates and consider the advantages of departmental overhead rates compared to blanket overhead rates. (5 marks) The manufacturing overheads for Pakistani Perfect Produce Plc, located in Lahore, for the year ending 30\"I April 2021 are as follows: PKR Rent, rates, heat, light 3,000,000 Depreciation of machinery 1,100,000 Supervisory salaries 1,250,000 Total 5,350,000 PKR is the currency symbol for the Pakistani Rupee. Two products are manufactured, and the following details apply: Sellingprice per unit Direct material cost - - r unit Direct labour hours er unit Total units rodnced and sold Labour charge per hour is PKR 22.50. Required (cont): c} Calculate the prot per unit for each product. Use blanket rates to allocate the overheads, with direct labour hours, as a basis for allocation. (10 marks) Further details apply, in respect ofthe two production departments A and B; and the service department C1 Dept. A Dept. B Dept. C Total Number of 40,000 50,000 35,000 125,000 employees Value of xed PKR 2,000,000 PICR 1,600,000 PKR 300,000 PKR 4,400,000 assets (Question dis on the "manage. Please turn page mr.) May 21m bum to WAmamng ACCOJ'DGJ PageSof? d} Show numerically and explain how.r you would apportion the supervisory salaries to the individual departments if you were to use departmental overhead rates rather than blanket rates (you don't need to calculate departmental rates jnst show and explain the apportionment step in the process). Clearly show your considerations and workings. (5 marks) Total 25 marks