Question 3 ( 35 marks) Medi Ltd has two production departments, A and B. The following budgeted overheads are expected to be incurred next quarter: Indirect materials Department 9,710 Department B 2,640 Indirect labour 16,709 Rent 38,700 Power 10,935 The following information is also available: Department A Department B Power usage 60% 40% No of workers 20 Floor area (m) 4,620 3,080 8 Department A is machine intensive while Department B is largely labour-based Information on machine and labour hours for the two production departments is shown below: Department A Department B Direct labour hours 3,600 10,600 Machine hours 13,300 4.800 REQUIRED: (0) Reproduce the table on the next page and calculate the overhead absorption rate in cach department by completing the table. You are required to use the most appropriate basis to apportion the relevant overhead costs. (Please show detailed workings and round up your answers to two decimal places.) (30 marks) () One of Medi Ltd's products is Sanitech. Cost information to produce one unit of Sanitech is as follows: Direct materials 3 kg at $6.70 per kg Direct labour 9 hours at S6 per hour Time Spent in Department A Department B 5 machine hours 7 direct labour hours Find the cost per unit of Sanitech (Please show detailed workings and express your answers in two decimal places.) (5 marks) Solutions 0 Basis Total s Production Department B s S Allocated Apportionment Total Activity Base Overhead Absorption Rate