Case Study PROGRAMME MODULE YEAR INTAKE MARKS Bachelor of Commerce in Accounting Cost and Management Accounting Two $(2)$January $2024$ Semester $130$ QUESTION $1(20$ Marks$)$A Cape Town$-$based manufacturing firm, CGH Manufacturing Enterprises $($CGHME$),$ has three production departments $($A$,$ B and C$)$ and the two service departments $($X and Y$).$ As part of the budgeting process, a senior cost accountant employed by CGHME has gathered the following annual overhead costs: Indirect materials: Production department A Production department B Production department C Service department X Service department YIndirect labour:Production department A Production department B Production department C Service department X Service department YHeating and lightingProperty taxInsurance of machinery Depreciation of machinery Insurance of buildingsSalaries of works management$4$R$250000402500525001000050000500000500000750000550000740000350000400000180000960000145000600000$ The following information is also available: Production department A Production department B Production department C Service department X Service department YCarrying value of machinery, R$400000025000005000002500002500007500000$Floor area occupied $($m$2)5000250075007500250025000$Number of employees $1501001505050500$Machine hours$1000000800000850000$ As an accounting intern in the office of the senior coststatement $($using traditional costing$).$ You have been asked to use the repeated distribution method to prepare the secondary allocation of the overheads of the two service departments $($X and Y$)$ to the three production departments $($A$,$ B and C$)$ according to the following percentages:accountant, you have been asked to prepare an overhead allocation Secondary allocation:Percentage of service department X to Percentage of service department Y toA B$20404020$C X Y$30-102020-$ The three production departments $($A$,$ B and C$)$ absorb overheads on machine hour basis.REQUIRED:$1\mathrm{.}1.$ Complete the primary allocation statement below.$(7$marks$)$ Primary allocations:Indirect materials Indirect labour Heating and lightingProperty taxInsurance of machineryDep. of machineryInsurance of buildings Salaries of works managementTotal primary allocations$1\mathrm{.}2.$Complete the secondary allocation statement below marks$)$PD B$402500500000?4000060000???2292000($where applicable, roundPD C $52500750000105000?12000?43500?2527000$of figures toSD X$10000550000105000?60003200043500?1326500$SD Y$50000740000??600032000145004600001377500$Basis TotalPD A$250000500000?80000?512000?$ GivenGiven $3$ Floor AreaFloor Area Mach. valueMach. value$765000040000350000400000180000960000145000$ Floor AreaNo. ofemploy $46000001044000013800002917000$ two decimal places$).(6$ Production departments ABCXY$29170002292000252700013265001377500?????????????????????????????????????????????????????--$Service departments Total primary allocation, R Service department X Service department Y Service department X Service department Y Service department X Service department Y Service department X Service department Y Service department X Service department Y Total allocated overhead $1\mathrm{.}3.$ Calculate the predetermined overhead absorption rates for the three production departments $($A$,$ B and C$)$ of CGH Manufacturing Enterprises for the forthcoming quarter $($round off answers to two decimal places$).(3$ marks$)1\mathrm{.}4.$ By citing the management accounting literature, state four $(4)$ advantages of predetermined overhead rate. $(4$ marks$)$