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The information given below relates to the forthcoming period for a manufacturers operation. There are four cost centres of which two are involved in production and two are service cost centres. Costs Total Production Department Service Department A B Canteen Stores RM RM RM RM RM Allocated costs 70,022 21,328 29,928 8,437 10,329 Other costs: Rent and rates 4,641 Buildings insurance 3,713 Electricity and gas 6,800 Plant depreciation 28,390 Plant insurance 8,517 The following are the normal activity rates for the departments: Production Department Service Department A B Canteen Stores Area occupied (square metres) 7,735 6,188 1,547 3,094 Plant at cost (RM000) 1,845 852 142 Number of employees 600 300 30 70 Machine hours 27,200 800 Direct labour hours 6,800 18,000 Number of stores requisitions 27,400 3,400 The company is preparing to bid for Job 847. The details are as follows: Direct material cost per unit RM487 Direct labour cost per unit RM317 Machine hours in department A 195 hours Direct labour hours in department B 102 hours REQUIRED: a. Calculate the production overhead absorption rate for departments A and B. b. Determine the total production cost for Job 847

The information given below relates to the forthcoming period for a manufacturer's operation. There are four cost centres of which two are involved in production and two are service cost centres. Production Department Total Service Department Canteen Stores Costs A B RM RM RM RM RM Allocated costs 70,022 21,328 29,928 8,437 10,329 Other costs: 4,641 3,713 Rent and rates Buildings insurance Electricity and gas Plant depreciation 6,800 28.390 Plant insurance 8,517 The following are the normal activity rates for the departments: Production Department Service Department B Canteen Stores Area occupied (square metres) 7,735 6,188 1,547 3,094 Plant at cost (RM'000) 1,845 852 142 Number of employees 600 300 30 70 Machine hours 27,200 800 Direct labour hours 6,800 18,000 Number of stores requisitions 27,400 3,400 The company is preparing to bid for Job 847. The details are as follows: Direct material cost per unit RM487 Direct labour cost per unit RM317 Machine hours in department A 195 hours Direct labour hours in department B 102 hours REQUIRED: a. Calculate the production overhead absorption rate for departments A and B. b. Determine the total production cost for Job 847

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