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20 Question 3 (35 marks) Twixie Co. is a manufacturing company with two production departments Cutting and Assembling Budgeted overhead costs for the third quarter of 2021 are listed below: Production Departments Costs allocated: Cutting 16,700 Assembling 10,950 Other overhead costs: Factory rent 120,000 Factory utilities 75,000 Power 28,000 Other information: Power usage Floor area (sq.m Head count Cutting Department 60% 20,000 Assembling Department 40% 10,000 10 Cutting Department is machine intensive while Assembling Department is largely labour-based Machine hours Direct labour hours Cutting Department 15,000 6,000 Assembling Department 5,000 14,000 Required: 1) Calculate the overhead absorption rate in each 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) (1) One of the products of Twisie Co. is Teenie. Cost information to produce one unit of Teenie is as follows: Direct materials 3 kg at $2.50 per kg Direct labour 2 hours at $6.50 per hour Time spent in: Cutting Department 3.0 machine hours Assembling Department 2.5 labour hours Find the cost per unit of Teenie. (Please show detailed workings and round up your answers to two decimal places) (5 marks) Solutions: 0 Basis Total S Production Department Cutting Assembling $ $ Allocated Apportionment Total Activity Base Overhead Absorption Rate Question 4 (10 marks) Define the term production overheads Give FIVE examples for a company that manufactures leather bags. (10 marks)

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