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Referring to the "initial product costings" on page 3 of the instruction, how were the overhead costs allocated to the three door types? Select one: O A. The total costs of 160,880 in Period 1 were divided by the planned total direct labour hours of 760 hrs for that period. Then this OAR was applied to allocate overheads to the different door types according to direct labour time. B. The period's total fixed overheads of 45,600 were divided by the planned total direct labour hours of 760 hrs for one period. Then this OAR was applied to allocate overheads to the different door types according to direct labour time. OC. The period's total fixed overheads of 45,600 were divided by the planned number of units of 6,080u for Period 1. Then this OAR was applied to allocate overheads to the different door types The Wooden Door Department ("WO" Dopl, WDD) The Rfe factory has a department that makes wooden doors for kitchen units. There are just three basic wooden doors, which, under the new arrangement, the Wooden Door Department (WDD) 'sells' to the Fishing Department (FD) where they are further customised through using different finishes, handles and so on. The Finishing Department (FD) then sell these doors, as well as other sections and components, to the Installation Department (D), which Installs the completed units. Wooden Door Dept (WDD). Pnishing Dept (0) Installation Dept The "WD" Dept makes the doors using fairly sophisticated machinery, but members of staff are required to prepare sheets of wood to be fed into the machines and then to finish the doors that emerge from the machines on a manual basi. The department has a manager (Sally Shah) and four other employees. Under the new arrangements, all five employees are to be paid the same hourly rate of 18 per hour. Sally wil aho receive a profitability bonus' of 10% of the profit of the department for each period The members of staff all work a 40-hour week (160 hours during each accounting period), but Sally h allowed 10 hours a week (10h4w = 40 hours for each periods of those for managerial duties and is therefore only expected to work 30 hours per week on production. This means a period total of 760 direct labour hours, that is (4 x 40 x 4 + 14 x 30). As with other departments, a subcontract price has been sought for the output. The WDD makes three doors. The total overheed cost for the WDD 1 245,600 for each period (all fixed). This indudes Saly's 40 hours of managerial time. The Initial product contings were as follows: Door Labour Labour Material Overhead Total Subcontractor's type time cost price cos cou cos A S mim 1.50 10.00 15.00 16,50 17.50 B 9 mins 2.70 2200 9.00 233.70 36.00 12 mins 23.60 25.00 12.00 40.60 45.00 Page 3 of

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