a. Singer has applied overhead of RM75,000 and actual overhead of RM90,000 for the month of October. It applies overhead based on direct labor hours and those equaled 15,000 in October. Overhead for the year was estimated to be RM 1,000,000.

Compute the estimated direct labor hours for the year.

b. Singer Sdn Bhd makes treadmills. The company controller wants to calculate the fixed and variable cost associated with the janitorial costs incurred in the factory. Data for the past four months were collected.

Month

Janitorial costs (RM)

Machine hours

September

12,000

710

October

11,600

675

November

10,400

610

December

10,925

650

Using the high-low method calculate the fixed cost of janitorial services.

c. Valser Enterprise incurred the following costs and machine for the months of June and July.

Types of cost

April (RM)

May (RM)

Insurance

20,000

20,000

Factory supplies

4,000

5,000

Direct labour

30,000

37,500

Maintenance

6,500

6,750

Machine hours

2,000

2,500

i) Assuming that the driver for all costs is machine hours, determine the cost behavior of

each of the four type of costs above (fixed, variable or mixed).

ii) Assume that the following is the cost formula for maintenance cost. Total maintenance

cost = RM 5,000 + (0.05 no of machine hours). Construct a cost formula to be use

to estimate total monthly costs within the relevant range.

iii) Estimate the total monthly costs to be incurred by Valser Enterprise at a level of 1200 machine hours.