Required: (i) COMPUTE overhead absorption rate per production hour of each production department. (ii) DETERMINE the total cost of product X which is processed for manufacture in department P1, P2 and P3 for 5 hours, 3 hours and 4 hours respectively, given that its direct material cost is ` 12,500 and direct labour cost is ` 7,500.

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PL Ltd. has three production departments P1, P2 and P3 and two service departments S1 and S2. The following data are extracted from the records of the company for the month of October, 2020: (7) Rent and rates 12,50,000 General lighting 1,50,000 Indirect Wages 3,75,000 Power 5,00,000 Depreciation on machinery Insurance of machinery 10,00,000 4,00,000 Other Information: P1 P2 P3 S1 S2 Direct wages () 7,50,000 5,00,000 7,50,000 3,75,000 1,25,000 Horse Machines used Power of 60 30 50 10 Cost of machinery (?) 60,00,000 80,00,000 1,00,00,000 5,00,000 5,00,000 Floor space (Sq. ft) 2,000 2,500 3,000 2,000 500 Number of light 10 15 20 10 points Production hours 6,225 4,050 4,100 worked Expenses of the service departments S1 and S2 are reapportioned as below: P1 P2 P3 S1 S2 S1 20% 30% 40% 10% S2 40% 20% 30% 10% PL Ltd. has three production departments P1, P2 and P3 and two service departments S1 and S2. The following data are extracted from the records of the company for the month of October, 2020: (7) Rent and rates 12,50,000 General lighting 1,50,000 Indirect Wages 3,75,000 Power 5,00,000 Depreciation on machinery Insurance of machinery 10,00,000 4,00,000 Other Information: P1 P2 P3 S1 S2 Direct wages () 7,50,000 5,00,000 7,50,000 3,75,000 1,25,000 Horse Machines used Power of 60 30 50 10 Cost of machinery (?) 60,00,000 80,00,000 1,00,00,000 5,00,000 5,00,000 Floor space (Sq. ft) 2,000 2,500 3,000 2,000 500 Number of light 10 15 20 10 points Production hours 6,225 4,050 4,100 worked Expenses of the service departments S1 and S2 are reapportioned as below: P1 P2 P3 S1 S2 S1 20% 30% 40% 10% S2 40% 20% 30% 10%

Answer rating: 100% (QA)

Primary distribution summary Item of cost Basis of Total P2 P3 S1 S2 apportionment 3 2 Direct w... View the full answer