QUESTION 1 (20 MARKS) Qally Sdn Bhd. manufactures a fire-resistant commercial filing cabinet and sells to office furniture distributors. The company expected to manufacture 20,000 units of filing cabinet next year. Every file cabinet has to go through cutting, soldering and painting processes. Table I shows direct cost for each unit of filing cabinet. Table 2 show details data for each process/cost centre. Table 3 show details data for each activity and estimated overhead costs Table 1: Direct cost for filing cabinet Direct machine Direct labour Hour per unit Cost per hour Hour per unit Cost per hour 2.0 hour RM40 10 hours RM20 Direct material cost per unit RM55 Table 2: Detail data for each process/cost centre Cost pool/source (activity) Cost driver Cutting Soldering Painting Purchasing material purchase requisition 145 257 398 Utilities (ful and energy power (Watt) 885,000 1.050,000 165.000 Selling & Administration number of workers 125 437 Security floor area (m) 37.500 22.500 15,000 Table 3. Data on activities and overhead costs Cost pool/source (activity) Cost driver Total activity for all processes Purchasing material purchase requisition 800 purchases Utilities (ful and energy power (watt) 2,100,000 watt Selling & Administration number of workers 985 workers Security floor area (m) 75,000 m Total overhead costs (RM) 360,000 240,000 750,000 525,000 b) note** Calculate your answer with two decimal points a) Analyse the available information, determine the total cost to manufacture 20,000 units cabinet file based on machine hour using a traditional overhead method. (4 marks) Calculate total overhead cost for each process/cost centre using basis of apportionment of cost driver (5 marks) c) If the company is to use Activity Based Costing method (ABC), calculate the cost driver rate for each activity (4 marks) d) 0 Determine the total cost for 20,000 units product using Activity Based Casting (ABC) method (marks) (1) Compare the percentage difference of total cost per unit for traditional and ABC method for the product (2 marks) (III) Analyse the results in (die) and comment on the reason for the differences in the results from traditional and Activity Based Costing methods (2 marks) QUESTION 1 (20 MARKS) Qally Sdn Bhd. manufactures a fire-resistant commercial filing cabinet and sells to office furniture distributors. The company expected to manufacture 20,000 units of filing cabinet next year. Every file cabinet has to go through cutting, soldering and painting processes. Table I shows direct cost for each unit of filing cabinet. Table 2 show details data for each process/cost centre. Table 3 show details data for each activity and estimated overhead costs Table 1: Direct cost for filing cabinet Direct machine Direct labour Hour per unit Cost per hour Hour per unit Cost per hour 2.0 hour RM40 10 hours RM20 Direct material cost per unit RM55 Table 2: Detail data for each process/cost centre Cost pool/source (activity) Cost driver Cutting Soldering Painting Purchasing material purchase requisition 145 257 398 Utilities (ful and energy power (Watt) 885,000 1.050,000 165.000 Selling & Administration number of workers 125 437 Security floor area (m) 37.500 22.500 15,000 Table 3. Data on activities and overhead costs Cost pool/source (activity) Cost driver Total activity for all processes Purchasing material purchase requisition 800 purchases Utilities (ful and energy power (watt) 2,100,000 watt Selling & Administration number of workers 985 workers Security floor area (m) 75,000 m Total overhead costs (RM) 360,000 240,000 750,000 525,000 b) note** Calculate your answer with two decimal points a) Analyse the available information, determine the total cost to manufacture 20,000 units cabinet file based on machine hour using a traditional overhead method. (4 marks) Calculate total overhead cost for each process/cost centre using basis of apportionment of cost driver (5 marks) c) If the company is to use Activity Based Costing method (ABC), calculate the cost driver rate for each activity (4 marks) d) 0 Determine the total cost for 20,000 units product using Activity Based Casting (ABC) method (marks) (1) Compare the percentage difference of total cost per unit for traditional and ABC method for the product (2 marks) (III) Analyse the results in (die) and comment on the reason for the differences in the results from traditional and Activity Based Costing methods (2 marks)
