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QUESTION TWO [20] Bee Limited's factory comprises of two production departments, Milling and Finishing, and two service departments Maintenance and Administration. The following estimated data
QUESTION TWO [20] Bee Limited's factory comprises of two production departments, Milling and Finishing, and two service departments Maintenance and Administration. The following estimated data are provided: Production department Service department Milling Finishing Maintenance Administration Budgeted overheads R524 000 R480 000 R240 000 R150 000 Machine hours 30 000 20 000 Area occupied (m) 6 300 2 700 1 200 900 Number of 150 30 employees 100 40 Note: Administration department cost is allocated based on number of employees. Maintenance department cost is allocated based on area occupied. Production overheads are calculated based on machine hours. Required: 2.1. Calculate the Production Overhead for the Administration Department. (4) 2.2. Calculate the Production Overhead for the Maintenance Department. (4) 2.3. Calculate the Production Overhead for Milling and Finishing (separately) based on machine hours. 2.4. Differentiate between each of the following costs: 4.4.1 Period cost and product cost. 4.4.2 Direct cost and indirect cost
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