COST AND MANAGEMENT ACCOUNTING

Question $1($CLO$2)$

Mentari Sdn$.$ Bhd$.$ Is a manufacturing company. The company has three production departments, namely Machining, Assembly and Cutting departments, and a service department, Maintenance. Below is the information related to the company during the period.

Indirect Materials:

RM

Indirect Wages:

RM

Machining

$12,500$

Assembly

$6,000$

Machining

Assembly

Maintenance

$3,600$

Maintenance

$9,000$

$16,800$

$8,000$

Supervision

RM $45,000$

Rent and rates

RM $65,000$

Heating and lighting

RM $74,000$

Depreciation on equipment

RM $32,000$

Power

RM $78,000$

The following is additional information that can be used to apportion expenses to the department:

Machining

Assembly

Maintenance

Area Occupied $($m$^2)$

Book Value of Equipment $($RM$)$

$46,000$

No$.$ of Employees

Machine Hours

Direct Labor Hours

Total

$4,500$

$3,000$

$1,000$

$500$

$30,000$

$6,000$

$10,000$

$15$

$4$

$8$

$3$

$18,000$

$10,000$

$8,000$

$25,000$

$5,000$

$20,000$

It is agreed that Machining and Assembly will use $40\%$ and $40\%$ respectively of the service provided by the Maintenance department.

Required:

a$)$ Prepare an overhead analysis sheet for the company.

$(20$ marks$)$

b$)$ Calculate overhead absorption rate for the production departments using machine hour for Machining department, and direct labour hour for Assembly department.

$(5$ marks$)$

$($Total: $25$ Marks$)$