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Question 1: Assume HandyToys uses department factory overhead rates in its production of Toy Cars and Toy Trains. Production takes place in two departments: Cutting and Assembly. In the Cuting department, the materials are cut and painted. In the Assembly department, the toys are put together by hand. HandyToys allocates factory overhead costs on the basis of direct labour hours. Each department has budgeted 5,000 labour hours. The budgeted factory overhead costs in the Cutting department are estimated at R80,000 while those in the Assembly department are estimated at R160,000. The factory overhead rate for the Cutting department is:
Option A. None of the above
Option B. R32
Option C. R24
Option D. R16
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