SECTION C: LONG ANSWER QUESTION (20 MARKS) ANSWER THE QUESTION QUESTION 1 Citrus Juices produce pure fruit juices. They have two processing departments, Preparation and Mixing, and one service department, Maintenance. The following information is available for the purpose of departmentalising the manufacturing overheads. Preparation Mixing Maintenance Direct labour hours 5 000 hrs 5 000 hrs 1 000 hrs Machine hours 6 250 hrs 8 400 hrs 1 200 hrs R7 500 R10 000 R2 500 Value of machinery No. of employees 12 6 3 Floor area 8 000 m 5 000 m 2 000 m Material usage R5 690 R6 875 R1 050 The following amounts represent the budgeted manufacturing overheads: Insurance R - Buildings 15 000 - Machinery Depreciation of machinery Maintenance of buildings Specialised clothing Cooling of factory buildings Indirect materials - Preparation department - Mixing department - Maintenance department 20 000 80 000 105 000 13 650 33 750 3 500 2 980 5 625 Direct labour hours are used as a basis of the secondary allocation of overheads. REQUIRED (a) Prepare an overhead allocation statement. (18) (b) Calculate the overhead allocation rate for each of the process departments based on machine hours. (2) [20]