Medley Ltd makes dishwashers. There are three production departments: machining, assembly and finishing; and two service departments: maintenance and stores.
Costs are as follows:

Production statistics are:

Tasks:
1.  Calculate an overhead absorption rate based on direct labour hours for each production department.
2.  A standard dishwasher uses 4, 3 and 2 direct labour hours in machining, assembly and finishing respectively. If all direct labour is paid £5.00/hour and the cost of materials for one dishwasher is £48, what is the production cost of one dishwasher?

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Assembly Machining Finishing Stores Maintenance Direct materials Direct wages Indirect wages Indirectmaterials £240,000 £160,000 £40,000 £200,000 £9,000 £150,000 £8,000 £100,000 £8,000 £8,000 £11,000 £4,000 Factory overheads are: Business rates Factory manager's salary Heat and light Depreciation of machinery £30,000 £30,000 £20,000 £40,000 Machining Assembly Finishing Maintenance Stores Personnel Area (sq. metres) Kilowatt hours (000) Machinery cost (£000) Direct labour hours (000) Machine maintenance hours Material issue notes 4 1,000 3,000 20 15 10 4,000 4,000 8,000 100 40 30 10 20 100 40 850 50 30 50 20 600 200 100 1,800 1,000 500