TASK 3 CD Bakers produces cakes in its factory. The factory has two departments, baking and packing, and the following budgeted overhead costs which require allocating between the two departments C Machinery Insurance 40,000 Supervisory salaries 180,000 Factory rent, des and insurance 100,000 Factory lighting 20,000 Machinery depreciation 60,000 Factory heating 30,000 The following additional information is available: Baking Packing 1,375 1,125 225,000 75,000 Floor area (square metres) Machinery cost (E) Volume (cubic metres) Number of employees Number of machine hours 16,500 13,500 10 20 72,500 6,000 Number of labour hours 21,250 42,500 Required: 3a) Using the table below, allocate the factory overheads to the two departments using any systematic basis for the allocation and calculate the most suitable hourly overhead absorption rate for each department. Overhead Basis Baking Packing E Machinery insurance Supervisory salaries Rent, rates and insurance Factory lighting Machinery depreciation 7 Factory heating Total Baking: hourly overhead absorption rate: Packing: hourly overhead absorption rate: 3b) Two products (out of a product range of hundreds) are to be costed; the Shimmer and the Glow cake. The Shimmer cake spends 5 hours in the baking cost centre/ 2 hours in packing. The Glow cake spends 1.5 hours baking and 15 minutes packing L L