Management Accounting

Question 1 Solidform Sdn Bhd manufactures furniture to order. It is divided into two production departments, A and B, and two service departments, X and Y. The following are the projected overhead costs for the coming year: Total (RM) Rental 25,000 Lighting and heating 18,000 Machine insurance 20,000 Depreciation of machinery 35,000 98,000 The company manufactures furniture with a high level of human capital, the details of which, as well as other statistics and information, are provided below: A B X Y Floor area occupied (sq. metres) 1,500 2,500 500 500 Machine value (RM) 12,000 24,000 2,000 2,000 Machine hours 1,000 1,500 Direct labour hours 1,500 2,000 Labour rates per hour (RM) 6.00 6.00 4.00 4.00 Allocated overheads: Specific to each department (RM) 5,000 6,000 2,000 1,000 Service Department X's costs apportioned 20% 80% Service Department Y's costs apportioned 50% 50% Required: (a) Prepare a statement outlining the overhead costs budgeted for each department, as well as the method of apportionment used and the appropriate overhead absorption rates (Remember to round your answer to the nearest two decimal digits). (16 marks)