Question
Question 1 (June 2015) Perwaja Bhd produces two steel products known as Ironman and Ultraman. Each product started in the Machining Department and completed in
Question 1 (June 2015)
Perwaja Bhd produces two steel products known as Ironman and Ultraman. Each product started in the Machining Department and completed in the Finishing Department. There are also two service departments, canteen and maintenance in the factory. During the priod just ended, actual overhead costs were as follows:
Total (RM) Machining Finishing Canteen Maintenance
Allocated overhead (RM) 105,000 48,750 30,000 11,250 15,000
Depreciation on equipment (RM) 31,875
Rent, rates and electricity (RM) 16,350
Additional infromation:
Background of departments:
Total (RM) Machining Finishing Canteen Maintenance
Cost of equipment (RM) 159,375 75,000 46,875 11,250 26,250
Floor area (sq meters) 8,100 2,700 1,800 1,350 2,250
Number of employees 50 20 20 5 5
Machine hours (MH) 36,900 36,900 - - -
Direct labour cost (RM) 40,000 4,000 36,000
The service departments overhead cost are re-apportioned as follows: Canteen - number of employees Maintenance - 70% for Machining department, 30% for Finishing department
Required:
Prepare overhead analysis sheet. (10 marks)
Calculate the overhead rates assuming Machining Department uses machine hours and Finishing Department uses percentage of direct labour costs. (2 marks)
Based on the following information relates to the making of a unit of Ironman, calculate the production cost for Ironman. (3 marks)
Ironman
Direct material cost RM220
Direct labour cost:
Machining department RM130
Finishing department RM90
Machine hour 6 hours
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started