sragraph Styles ope absoption coting sysom Is budget for the your ended 31 Depember showe thuat Machining department Hand finishing department Foed 15)Variable () 480,000 400,000 600,000 360,000 During the year it expects to make 200,000 units of its product. This is expected to take 80,000 machine hours in the machining department and 120,000 lebour hours in the hand finishing department The costs and actvity are expected to arise evenly throughout the year, and the budget has been used as the basis of calculating the company's absonption rales During Maroh the monthly profits statement reported That the actual hours worked in each department were Machining Hand finishing That the actual overhead costs incurred were:- 6,000 hours 9,600 hours (i) Fixed 48,500 33,600 Variable Machining department Hand finishing department 36,000 33,500 (ii) That the actual production was 15,000 units (a) Calculate appropriate pre-determined absorption rates for the year ended 31 December (b) Calculate the under/over absorption of overhead for each department of the Required: Company for March (0) Comment on the problems of using predetermined absorption rates based on the arbitrary apportionment of overhead costs, with regard to comparisons of actual/target performances (c) State the reasons why absorption costing is used by companies ia) Justity why budgeted overhead rates should be used in preference to actual overhead rates