QUESTION 1 (25 MARKS) Merbau Furniture is a main manufacturer of custom-made office furniture in Ipoh, Perak. The company applies job order costing system, where each client's order is treated as separate job. The company currently uses the single rate of overhead absorption rate based on direct labour cost. Given below is the data for the period ended 31 January 2021:

Machining Finishing Department Department Budgeted direct labour hours 85,000 hours 65,000 hours Budgeted machine hours 38,000 hours 35,000 hours Budgeted manufacturing overhead RM820,000 RM660.000 Actual direct labour hours 80,000 hours 62,000 hours Actual machine hours 32,000 hours 30,000 hours Actual manufacturing overhead RM747,500 RM567.500Job No. 0121 Direct materials: Machining Department RM19,500 Finishing Department RM10,000 Direct labour: Machining Department 1,000 hours Finishing Department 900 hours Hire of special machine: Machining Department RM8,500 Administrative expenses 20% of manufacturing costs Machine hours: Machining Department 700 hours Finishing Department 500 hours