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Hang Nadim Enterprise manufactures wooden chairs for local market. The manufacturing of wooden chairs must go through two production cost centers which are Machining and
Hang Nadim Enterprise manufactures wooden chairs for local market. The manufacturing of wooden chairs must go through two production cost centers which are Machining and Assembly department. The company also has two service cost centers namely Store and Maintenance department that support the activities of the production department. For the year ended 31 December 2018, Hang Nadim Enterprise incurred the following expenses: RM Direct materials Indirect materials 250,000 150,000 Indirect labour 67.000 Supervisor salaries 79,000 Insurance on plant and machinery 21.000 Power 30,000 Rental 15,000 Building insurance 13,000 Both indirect materials and indirect labour will be allocated based on the ratio 30:30:20:20 to Machining, Assembly, Store and Maintenance department, respectively. Other related information is as follow: Basis Machining Assembly Store Maintenance Total Cost of plant and machinery 220,000 200,000 50,000 30,000 500,000 (RM) Horsepower 500 Floor area (sq. feet) 4,500 250 3.000 100 150 1,500 1,000 1,000 10.000 Number of material requisition 100 150 - 10 110 260 notes Maintenance hours 450 400 10 860 Direct labour hours 30,000 20.000 10.000 10,000 70.000 Machine hours Number of employees 20,000 20 17,000 8,000 9,000 54,000 60 10 10 100 Required: a. Differentiate with an example cost apportionment and cost reapportionment. (4 marks) b. Prepare the overhead analysis sheet, clearly showing the basis of apportionment and reapportionment using repeated distribution method. (All calculations are to be rounded to the nearest RM) (17 marks)
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