The following is the budget for the year 2015 from Jitegemee Ltd

Factory overheads Shs.52, 000

Direct labour cost Shs.88, 000

Direct labour hours Shs. 135,000

Machine hours Shs. 40,000

Actual labour hours were Shs.30, 000

Actual machine hours were Shs.20, 000

Actual direct labour costs were Shs.40, 000

Actual direct material costs were Shs.35, 000

Required: Determine:

a) The overhead application rate on the basis of

i. Direct labour hours (2 Marks)

ii. Direct labour cost

iii. Machine hours

b) Overhead costs based on the absorption rates above

c) Total Production cost