REQUIRED

Use the information provided below to answer the following questions:

1.1 Prepare the overhead allocation statement. (13 marks) 1.2 Calculate the allocation rate (expressed to the nearest cent) for each of the production centres, based on machine hours for Machine centres X and Y and direct labour hours for Assembly. (3 marks) 1.3 Calculate the overheads applied to each batch of the product. (4 marks) INFORMATION Mali Limited has three production centres (Machine centre X, Machine centre Y and an Assembly centre) and two service centres (Materials procurement and General manufacturing support). The annual overhead costs are as follows: R Electricity 170 000 Rent expense 350 000 Insurance of machinery 50 000 Depreciation of machinery 520 000 Insurance of buildings 90 000 Salaries of works management 280 000 Indirect materials: Machine centre X 175 000 Machine centre Y 280 000 Assembly centre 36 000 Materials procurement 0 General manufacturing support 4 000 Indirect labour: Machine centre X 350 000 Machine centre Y 350 000 Assembly centre 520 000 Materials procurement 380 000 General manufacturing support 510 000 The following information is also provided: Production and service centres Carrying value of machinery Area occupied (m2 ) Number of employees Direct labour hours Machine hours Machine centre X R2 500 000 2 500 75 250 000 500 000 Machine centre Y R1 700 000 1 250 50 250 000 250 000 Assembly centre R400 000 3 750 75 500 000 Materials procurement R200 000 3 750 25 General manufacturing support R200 000 1 250 25 Total materials issues (both direct and indirect) to the production centres are as follows: Machine centre X R1 400 000 Machine centre Y 840 000 Assembly centre 560 000 R2 800 000 Secondary allocation: The value of materials issued is used as a basis for the materials procurement cost centre and direct labour hours as the basis for the general manufacturing support cost centre. The product is produced by Mali Limited in batches of 100. Each unit spends 2.5 hours in Machi