1. The Manufacture cost for Buccaneers Ltd for next year is expected to be made up as follow
   

page 4/4 MULTI-PRODUCT BUSINESSES The following additional information is available: (1) Each of the four departments is treated as a separate cost centre. (ii) All direct labour is paid $6 an hour for all hours worked. (iii) The administration department renders personnel and general services to the pro- duction departments. (iv) The area of the premises in which the business manufactures amounts to 50,000 square metres, divided as follows: Sq m Forming department 20,000 Machining department 15,000 Finishing department 10,000 Administration department 5,000 (v) The maintenance employees are expected to divide their time between the pro- duction departments as follows: Forming department 15 Machining department 75 Finishing department 10 (vi) Machine hours are expected to be as follows: Hours Forming department 5,000 Machining department 15,000 as Finishing department 5,000 On the basis of this information: (a) Allocate and apportion overheads to the three product cost centres. (b) Deduce overhead recovery rates for each product cost centre using two different bases for each cost centre's overheads. (c) Calculate the full cost of a job with the following characteristics: Direct labour hours: Forming department 4 hours Machining department 4 hours Finishing department 1 hour Machine hours: Forming department 1 hour Machining department 2 hours Finishing department 1 hour Direct materials: Forming department 240 Machining department Finishing department Use whichever of the two bases of overhead recovery, deduced in (b), that you con- sider more appropriate. (d) Explain why you consider the basis used in (c) to be the more appropriate