Answer Question d,e,f based on pictures below:

Andreas owns a business manufacturing bicycles. The business operates two production departments, Machining and Assembly, and two service departments, Stores and Maintenance.

The following information is available for one bicycle.

Direct materials $45.60

Direct labour: Machining ($10 per hour):30 minutes

Direct labour: Assembly ($12 per hour) :105 minutes

Machine hours: Machining: 20 minutes

Machine hours: Assembly:15 minutes

Total budgeted overheads for the year ended 31 August 2023 are as follows:

Indirect wages $ 420000

Factory rent and rates 30000

Machine overheads 22000

The following information is also available.

	Production departments	Production departments	Service departments	Service departments
	Machining	Assembly	Stores	Maintenance
Floor space (square metres)	4000	5600	1800	600
Number of orders from stores	2100	1600		500
Maintenance call outs	210	40
Budgeted direct labour hours	22200	77700
Budgeted machine hours	34300	25700
Number of indirect employees	4	12	2	2

Machine overheads are apportioned on the basis of machine hours.

(a)Complete the table to show the apportionment of the budgeted overheads for the year ended 31 August 2023.

		Production departments	Production departments	Service departments	Service departments
	total	Machining	Assembly	Stores	Maintenance
Indirect wages	420000
Factory rent and rates	30000
Maintenance overheads	22000
Total overheads	472000
Apportion stores
Subtotal
Apportion maintenance
Total overhead costs

Andreas has been approached by a new customer wishing to make a special order for 120 bicycles, with modifications to the customer's own specification. In order to complete the order, the following would apply for the manufacture of one bicycle.

1.The total material cost would increase by 30%.

2.The direct labour hours in the machinery department would increase by 50% and an additional 15 minutes of direct labour hours would be required in the assembly department.

3.Due to workers in the assembly department already working at full capacity, these workers would have to work overtime to complete the order at a premium of 25% on the usual direct labour rate.

(d) Calculate the direct cost of producing one bicycle for the special order.

Additional information

In order to remain competitive, Andreas wishes to achieve a 30% gross profit margin on all work.

(e) Prepare a statement to show the total selling price that Andreas should quote to the customer in order to achieve a 30% gross profit margin on the order.

Additional information

Having received the quotation from Andreas, the customer has stated that he will commit to a

regular monthly order of 100 of the special bicycles if Andreas will offer a 10% discount on the quoted price and allow 2 months' credit.

Andreas's business is successful, though managing cash flow is often difficult.

(f) Advise Andreas whether he should accept the terms offered by the customer. Justify your answer.

The actual results for the year ended 31 August 2023 were as follows: (c) Calculate the over-absorption or under-absorption of overheads for each production department. Having received the quotation from Andreas, the customer has stated that he will commit to a regular monthly order of 100 of the special bicycles if Andreas will offer a 10% discount on the quoted price and allow 2 months' credit. Andreas's business is successful, though managing cash flow is often difficult. (f) Advise Andreas whether he should accept the terms offered by the customer. Justify your answer. Additional information Andreas has been approached by a new customer wishing to make a special order for 120 bicycles with modifications to the customer's own specification. In order to complete the order, the following would apply for the manufacture of one bicycle. 1 The total material cost would increase by 30%. 2 The direct labour hours in the machinery department would increase by 50% and an additional 15 minutes of direct labour hours would be required in the assembly department. 3 Due to workers in the assembly department already working at full capacity, these workers would have to work overtime to complete the order at a premium of 25% on the usual direct labour rate. (d) Calculate the direct cost of producing one bicycle for the special order. (a) Complete the table to show the apportionment of the budgeted overheads for the year ended 31 August 2023. [0] (b) Calculate, to two decimal places, an overhead absorption rate for each production department, using a suitable basis. Additional information In order to remain competitive, Andreas wishes to achieve a 30% gross profit margin on all work. (e) Prepare a statement to show the total selling price that Andreas should quote to the customer in order to achieve a 30% gross profit margin on the order. departments, a business manufacturing bicycles. The business operates two production departments, Machining and Assembly, and two service departments, Stores and Maintenance. The following information is available for one bicycle. Total budgeted overheads for the year ended 31 August 2023 are as follows: The following information is also available. Machine overheads are apportioned on the basis of machine hours