QUESTION 2 (26 MARKS) Sonja Cc is a small firm that makes outfits for customers tailored for their functions, in May 20

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QUESTION 2 (26 MARKS)
Sonja Cc is a small firm that makes outfits for customers tailored for their functions, in May 2021 she has orders for a baby shower (BS) and a bridal party (BP).
The details for Job BS are as follows:
Direct materials: 12 units at N$124.
Direct labour: - 20 hours for department A at N$25 per hour
- 10 hours for department B at N$30 per hour
- 12 hours for department C at N$27.5 per hour
The firm allocates manufacturing overheads budgeted at N$2 500 in department A, N$2 000 in department
B and N$3 000 in department C.
The firm expects a profit of 55% on the total cost of BS.
The details for Job (BP) are as follows:
Direct materials: 10 units at N$108.
Direct labour: - 16 hours for department A
- 10 hours for department B
- 14 hours for department C
The labour hours are budgeted at 40, 25 and 30 in departments A, B and C respectively.
The firm expects a profit of 40% on the total cost of BP.
REQUIRED MARKS
3.1 Calculate the predetermined overhead allocation rate (OAR) for each department using labour hours as a base for such allocation. 3 marks
3.2 Calculate the cost of a bridal party (BP). 8 marks
3.3 Calculate the Selling price of the bridal party (BP). 3 marks
3.4 Calculate the cost of a baby shower (BS). 8 marks
3.5 Calculate the Selling price of a baby shower (BS). 3 marks
3.6 If the number of outfits are the same for each type of function, which function should Sonja choose to produce and why? 1 mark
TOTAL MARKS FOR QUESTION 2, 26 marks