COST ACCOUNTING : OVERHEAD

Glamping Sdn Bhd is a company that is involved in the production of various types of camping tents. The company has three production departments: Designing, Cutting and Sewing; and two service departments: Quality Assurance and Stores. Cutting and Sewing departments used highly sophisticated machinery, while the Designing department is labour-oriented. The following budgeted information is for the month of August 2022: Total Costs Direct material Indirect material Direct labour Indirect labour Other allocated cost Depreciation of machines Supervisor's salary Factory utilities Power Additional information: Designing Cutting Sewing Quality Stores Assurance (RM) (RM) (RM) 1,500 1,500 2,000 800 (RM) 75,000 24,000 8,000 67,000 14,000 32,000 7,800 16,000 5,534 34,000 28,000 46,000 52,000 Floor area (m) Number of employees Book value of machine (RM) Machine hours Kilowatt hours Number of quality inspections Number of material requisition Direct labour hours Designing 2,400 70 72,000 4,000 1,800 12 45 6,600 (RM) (RM) 50,000 25,000 6,000 7,000 32,000 21,000 8,400 9,600 4,175 3,591 Cutting Sewing 2,400 3,600 105 105 48,000 120,000 6,000 8,000 3,600 21 90 4,200 3,600 24 104 3,200 4,200 2,400 Quality Assurance 1,800 35 30,000 1,000 11 . Stores 1,800 35 5,000 1,000 3 Required: a. b. C. Prepare an overhead analysis sheet, clearly showing the basis of apportionment. (Note: All calculations should be rounded up to the nearest RM) (21 marks) Calculate the overhead absorption rates (OAR) for each of the production department. (Note: All calculations should be rounded up to two decimal places) (3 marks) Compute the over-absorption or under-absorption of overheads for each production department. The actual information for the overhead costs is as follows: Total overheads (RM) Direct labour hours Machine hours Designing Cutting 67,800 85,040 7,260 3,520 4,200 6,300 Sewing 99,060 3,670 8,400