DeSintok Plant of Northern Industries Sdn Bhd (NISB) manufactures a special transformer part. The plant measures production level in terms of direct labor hours (DLHs) and uses a flexible budget system to plan and control departmental overhead costs. The following standard cost is developed for the special transformer.

Quantity Price Cost (RM) RM) Direct material: Iron 5 sheets 2.00 10.00 Copper 3 spools 3.00 9.00 Direct labor 4 hours 7.00 28.00 Variable manufacturing overhead (VMOH) 4 hours 3.00 12.00 Fixed manufacturing overhead (FMOH) 4 hours 2.00 8.00 Total 67.00Direct materials: Iron Purchased 5,000 sheets at RM2/sheet and used 3,900 sheets Copper Purchased 2,200 spools at RM3.10/spool and used 2,600 spools Direct labor The first 2,000 hours @ RM7 and the following 1,400 hours @ RM7.20 VMOH RM12.000 FMOH RM8.800