- Hang Nadim Enterprise Manufactures Wooden Chairs For Local Market The Manufacturing Of Wooden Chairs Must Go Through Tw 1 (72.71 KiB) Viewed 126 times
- Hang Nadim Enterprise Manufactures Wooden Chairs For Local Market The Manufacturing Of Wooden Chairs Must Go Through Tw 2 (36.17 KiB) Viewed 126 times
Hang Nadim Enterprise manufactures wooden chairs for local market. The manufacturing of wooden chairs must go through two production cost centers which are Machining and Assembly department. The
company also has two service cost centers namely Store and Maintenance department that support the activities of the production department. For the year ended 31 December 2018, Hang Nadim Enterprise incurred the following expenses: RM 250,000 Direct materials Indirect materials Indirect labour 150,000 67,000 Supervisor salaries 79,000 Insurance on plant and machinery 21,000 Power 30,000 Rental 15,000 Building insurance 13,000 Both indirect materials and indirect labour will be allocated based on the ratio 30:30:20:20 to Machining, Assembly, Store and Maintenance department, respectively. Other related information is as follow: Basis Machining Assembly Store Maintenance Total Cost of plant and machinery 220,000 200,000 50,000 30,000 500,000 (RM) Horsepower 500 250 100 150 1,000 Floor area (sq. feet) 4.500 3,000 1,500 1,000 10,000 Number of material requisition notes 100 150 10 260 Maintenance hours 450 400 10 860 Direct labour hours 30,000 20,000 10,000 10,000 70,000 Machine hours 20,000 9.000 54,000 17,000 8.000 60 Number of employees 20 10 10 100 Required: a. Differentiate with an example cost apportionment and cost reapportionment. (4 marks) b. Prepare the overhead analysis sheet, clearly showing the basis of apportionment and reapportionment using repeated distribution method. (All calculations are to be rounded to the nearest RM) (17 marks)
C. Calculate the overhead absorption rate (OAR) for each production departments using the basis below. (Answers are to be rounded to two decimal places) Department Basis Machining Machine hours Direct labour hours Assembly (3 marks) d. Given below are the actual data for the year ended 31 December 2018: Department Machining Assembly 80,000 60,000 Total overheads (RM) Direct labour hours 5,000 6,500 Machine hours 7,500 8,000 By using the OAR that had been calculated in (c), calculate the under or over absorption of overheads in each production cost center. (Answers are to be rounded up to the nearest RM) (6 marks) (Total: 30 marks)