QUESTION $2$

$(31$ marks$)$

Tooty Fruity $($Pty$)$ Ltd $("$Tooty Fruity"$)$ manufactures a range of dried fruit products using three production departments and one service department, named the Purchasing department. The total budgeted manufacturing overheads for the financial year ended $30$ June $2024$ is R$1050640$ and Tooty Fruity was operating for $46$ weeks in the $2024$ budget period.

The following information relates to Tooty Fruity's four $(4)$ departments:

$\backslash$table$[[,\backslash$table$[[$Production$],[$department A$]],\backslash$table$[[$Production$],[$department B$]],\backslash$table$[[$Production$],[$department$],[$C$]],\backslash$table$[[\backslash$table$[[$Service$],[$department$]]]]],[\backslash$table$[[$Direct$],[$budgeted$],[$overheads:$]],$R$278540,$R$234580,$R$95360,$R$54200],[\backslash$table$[[$Ratio to$],[$apportion$],[$indirect$],[$budgeted$],[$overheads:$]],45\%,30\%,20\%,5\%],[\backslash$table$[[$Department$],[$specific$],[$information:$]],\backslash$table$[[-11$ direct$],[$employees$.],[-$ Each$],[$employee$],[$works $38],[$hours per$],[$week$.]],\backslash$table$[[-6],[$machines$.],[-$ Each$],[$machine$],[$operates$],[20$ hours$],[$per week.$]],\backslash$table$[[$Expected$],[$production of$],[110000$ units$],[$in the$],[$budgeted$],[$period$.]],\backslash$table$[[$Service$],[$department$],[$overheads$],[$are$],[$apportioned$],[$equally to$],[$each$],[$production$],[$department$.]]]]$ QUESTION $2$

$(31$ marks$)$

Tooty Fruity $($Pty$)$ Ltd $("$Tooty Fruity"$)$ manufactures a range of dried fruit products using three production departments and one service department, named the Purchasing department. The total budgeted manufacturing overheads for the financial year ended $30$ June $2024$ is R$1050640$ and Tooty Fruity was operating for $46$ weeks in the $2024$ budget period.

The following information relates to Tooty Fruity's four $(4)$ departments:

$\backslash$table$[[,\backslash$table$[[$Production$],[$department A$]],\backslash$table$[[$Production$],[$department B$]],\backslash$table$[[$Production$],[$department$],[$C$]],\backslash$table$[[\backslash$table$[[$Service$],[$department$]]]]],[\backslash$table$[[$Direct$],[$budgeted$],[$overheads:$]],$R$278540,$R$234580,$R$95360,$R$54200],[\backslash$table$[[$Ratio to$],[$apportion$],[$indirect$],[$budgeted$],[$overheads:$]],45\%,30\%,20\%,5\%],[\backslash$table$[[$Department$],[$specific$],[$information:$]],\backslash$table$[[-11$ direct$],[$employees$.],[-$ Each$],[$employee$],[$works $38],[$hours per$],[$week$.]],\backslash$table$[[-6],[$machines$.],[-$ Each$],[$machine$],[$operates$],[20$ hours$],[$per week.$]],\backslash$table$[[$Expected$],[$production of$],[110000$ units$],[$in the$],[$budgeted$],[$period$.]],\backslash$table$[[$Service$],[$department$],[$overheads$],[$are$],[$apportioned$],[$equally to$],[$each$],[$production$],[$department$.]]]]$ ANNEXURE F: FORMATIVE ASSESSMENT $1$

In addition to the existing service department, Tooty Fruity is considering establishing

three additional service departments: a Canteen $-,$ Human Resources $-$ and a

Maintenance department.

REQUIRED:

$2\mathrm{.}1.$ Calculate an appropriate predetermined overhead absorption rate in each

production department.

$(19$ marks$)$

$2\mathrm{.}2.$ Calculate the manufacturing overhead cost per unit of finished product in a

batch of $95$ units which take $8$ direct labour hours in department A and two $(2)$

machine hours in department $B$ to produce.

$(4$ marks$)$

$2\mathrm{.}3.$ Briefly explain the advantage of using multiple overhead rates instead of a

single plantwide overhead rate to apply overheads.

$(2$ marks$)$

$2\mathrm{.}4.$ For each of the possible new service departments, indicate two potential

bases for each service department that could be used to allocate costs to the

production departments.

Round your answers to two decimal places where required.

Show all your workings clearly.

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