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E. Dollmaker Sdn. Bhd. produces dolls for children at its factory. The factory has three production departments namely, Moulding, Assembly and Glazing. The company uses
E. Dollmaker Sdn. Bhd. produces dolls for children at its factory. The factory has three production departments namely, Moulding, Assembly and Glazing. The company uses predetermined departmental rates for the absorption of overheads into its products. The overhead absorption rates were RM7.80, RM2.30 and RM3.60 for Moulding, Assembly and Glazing respectively. The OAR in the factory is based on machine hour for Moulding and direct labour hour for Assembly and Glazing departments. The following data were extracted from the company's annual budget for 2019: Departments Factory Direct labour Machine Overhead (RM) hours hours Moulding 140,000 2,500 18,000 Assembly 60,000 26,000 1,500 Glazing 50,000 14,000 3,500 Total 250,000 42,500 23,000 Actual data compiled for the year 2019 were as follows: Mouldin Assembly Glazing Total g 2,800 23,500 15,000 41,300 Direct labour hours worked Machine hours worked 20,200 1,300 3,500 25,000 Overhead expenses incurred (RM) 128,800 67,000 57,000 249,80 0 Required: a. Calculate the overhead absorbed into total production from each department. b. Determine the underlover-absorption of overhead expenses for each production department
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