three decimal places

QUESTION ONE BETA Lid has two production departments (P1 and P2) in its factory. Overheads in each department are currently absorbed into product costs on the basis of machine hours worked. The production overhead absorption rate in Department P1 is K5-60 per machine hour. In Department P2 the absorption rate is to be established from the following data relating to the department for a period: K Allocated production overheads 24,260 Apportionment of factory level production overheads 37,539 Apportionment of service department production overheads 32.911 94,710 Machine hours worked 11,550 The company is considering the introduction of a revised overhead apportionment system using activity-based costing. The overheads incurred in the factory in the period have been re-classified into activities, and cost drivers for each activity have been identified and measured, as follows: Cost driver volume Activity Overhead Cost driver (Depts P1 and P2) K Machine set up 22,224 batches 100 Machine operation 69,255 machine hours 25,650 Inspection and testing 42,816 units produced 446,000 Servicing 39,375 labour hours 18,750 Total 173.670 The following actual information is available for the period relating to Product X, one of the products manufactured in the factory: (1) 8 batches (2) 2,540 machine hours (Department P1: 1,400 hours; Department P2: 1,140 hours) (3) 58,068 units produced (4) 2,303 labour hours Required: (a) Using the existing absorption method: (i) Calculate the production overhead absorption rate in Department B; [2 Marks] (ii) Calculate the production overhead cost per unit of Product X. [3 Marks] (b) Using an activity-based approach