1. **State the problem:** Calculate the overhead absorption rate per unit of products A and B using various methods given the total budgeted overhead costs of 240000 and the production budget. 2. **Assumptions:** Since the production budget details (units, material cost, labour cost, prime cost, labour hours, machine hours) are not provided, let's define variables: - Let $U_A$ and $U_B$ be units produced of A and B respectively. - Let $M_A$, $M_B$ be material costs for A and B. - Let $L_A$, $L_B$ be labour costs for A and B. - Prime cost = material cost + labour cost. - Let $H_A$, $H_B$ be labour hours for A and B. - Let $MH_A$, $MH_B$ be machine hours for A and B. 3. **(a) Unit Method:** - Total units = $U_A + U_B$ - Overhead absorption rate per unit = $$\frac{240000}{U_A + U_B}$$ 4. **(b) Percentage on Material Cost:** - Total material cost = $M_A + M_B$ - Overhead absorption rate = $$\frac{240000}{M_A + M_B} \times 100\%$$ - Overhead per unit A = $M_A \times$ overhead rate - Overhead per unit B = $M_B \times$ overhead rate 5. **(c) Percentage on Labour Cost:** - Total labour cost = $L_A + L_B$ - Overhead absorption rate = $$\frac{240000}{L_A + L_B} \times 100\%$$ - Overhead per unit A = $L_A \times$ overhead rate - Overhead per unit B = $L_B \times$ overhead rate 6. **(d) Percentage on Prime Cost:** - Total prime cost = $(M_A + L_A) + (M_B + L_B)$ - Overhead absorption rate = $$\frac{240000}{\text{Total prime cost}} \times 100\%$$ - Overhead per unit A = $(M_A + L_A) \times$ overhead rate - Overhead per unit B = $(M_B + L_B) \times$ overhead rate 7. **(e) Labour Hour Rate:** - Total labour hours = $H_A + H_B$ - Overhead absorption rate per labour hour = $$\frac{240000}{H_A + H_B}$$ - Overhead per unit A = $H_A \times$ rate - Overhead per unit B = $H_B \times$ rate 8. **(f) Machine Hour Rate:** - Total machine hours = $MH_A + MH_B$ - Overhead absorption rate per machine hour = $$\frac{240000}{MH_A + MH_B}$$ - Overhead per unit A = $MH_A \times$ rate - Overhead per unit B = $MH_B \times$ rate **Note:** To compute exact numerical overhead absorption rates, the production budget details (units, costs, hours) for A and B are required. Final answer: Overhead absorption rates depend on the production budget data; formulas above show how to calculate each method once data is available.