QUESTION 2.3 CA Ltd is a small engineering factory which manufactures two different products in two production departments, In addition, a canteen is run as a separate department Product A R60 1500 500 8 Product B R70 3000 (500) 5 Selling price per unit Sales volume Increase (decr.) in finished goods (units) Material costs per unit Direct labour hours per unit Workshop (R3 per hour) Ass. department (R2 per hour) Machine hours per unit Workshop Assembly department 5 4 6 4 8 3 1 Workshop Assembly Canteen R R R Total R Factory overheads Variable Fixed 26 000 42 000 68 000 9000 30 000 39 000 16 000 16 000 35 000 88 000 123 000 Number of employees Floor area (M2) 15 4 000 9 1 000 1 1 000 YOU ARE REQUIRED TO: a) determine an appropriate overhead allocation rate for each production department and to calculate the total budgeted costs per unit for each product; and b) calculate the impact on the budgeted profit if the following year's actual results are as predicted, except that the sales and production of product A are 300 units more than what was budgeted