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A. Zara Catering Enterprise (ZCE) provides catering services for customers around Selangor, Malaysia. The services are categorized into two segments namely, (1) Budget package

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A. Zara Catering Enterprise (ZCE) provides catering services for customers around Selangor, Malaysia. The services are categorized into two segments namely, (1) Budget package and (2) Premium package. Information on the menu for the two packages are as below: Budget Package Menu White rice Fried chicken Vegetable Fruit Drinks Dessert Cost Premium Package Menu Cost RM RM 1.00 2 choices of rice 2.00 White rice/ briyani/nasi minyak 3.50 2 choices of main dishes 7.00 Chicken/ meet/fish 1.00 2 choices of vegetables 2.00 1.00 2 choices of fruits 2.00 1.00 Beverages 1.00 0.50 Desserts 1.00 ZCE uses job order costing method in calculating its cost of providing services based on customers' orders. Labors are paid on the daily basis when ZCE have orders. ZCE pays RM70 per day and one day is considered as an 8 working hours. Overhead costs are charged based on direct labor hours used for each job. Standard number of labors needed to serve 1,000 guests is 10 labors. Based on previous operations, ZCE has fixed the standard predetermined overhead rate at RM3 per direct labor hour. REQUIRED: (a) Calculate the total cost of the Premium Package order for a one-day wedding ceremony with invited guests of 2500. (7 Marks) (b) Determine the under/over applied overhead for the event in (a), realizing that the actual overhead incurred was RM800. (2 Marks) (c) Explain how the over/underapplied overhead should be treated to ensure accuracy of the actual cost of the event. (1 Mark)

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