MANUFACTURING OVERHEADS Thumamina Limited manufactures various products that are produced in two production departments: Department Q and Department V. In addition to these two production departments, the company has a service department, which provides support to the production departments. The following additional information is available: Department Q Department V Service department Number of employees 150 100 80 Floor space 2 050 m? 1 250 m2 1 100 m2 Value of machinery R900 000 R300 000 R250 000 Kilowatt hours 1 300 1 000 400 Labour hours 5 000 4 000 150 Machine hours 4 000 2 000 100 The budgeted manufacturing overheads for 2018 are as follows: Rent of building R1 010 000 Electricity R95 000 Depreciation of machinery (based on machine hours) R230 000 Salaries of supervisors R380 500 Insurance buildings (based on value of machinery) R150 755 Indirect material: Department Q R88 000 Department V R35 000 Service department R27 000 Required: Calculate the primary allocation of overheads per department as well as the secondary allocation per production department. The secondary allocation is done based on machine hours. Note: Round off all amounts to the nearest

A-6

Required information [The following information applies to the questions displayed below.] Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Average Cost per Unit $ 7.00 $ 4.00 $ 1.50 $ 5.00 $ 3.50 $ 2.50 $ 1.00 $ 0.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense

Bruce Corporation makes four products in a single facility. These products have the following unit product costs:   Products A B C D Direct materials $ 19.90 $ 15.20 $ 20.80 $ 23.20 Direct labor 12.20 8.70 10.50 7.40 Variable manufacturing overhead $ 1.60 $ 2.10 $ 2.00 $ 2.10 Fixed manufacturing overhead 10.80 11.90 8.80 10.70 Unit product cost 44.50 37.90 42.10 43.40 Additional data concerning these products are listed below.   Products A B C D Grinding minutes per unit 1.20 0.70 0.60 0.60 Selling price per unit $ 59.30 $ 51.70 $ 59.50 $ 55.60 Variable selling cost per unit $ 3.60 $ 1.50 $ 2.20 $ 3.60 Monthly demand in units 4,000 2,000 4,000 2,000 The grinding machines are potentially the constraint in the production facility. A total of 9,000 minutes are available per month on these machines. Direct labor is a variable cost in this company. Which product makes the MOST profitable use of the grinding machines? (Round your intermediate calculations to…