Question 1 Soy Asahi manufactures unique-taste soy sauce according to customers' preference. It has three production departments and two service departments. Overhead costs for the coming year is as follows: RM Indirect materials: Cleaning department 1,000 Rent and rates 12,800 Machine insurance 6,000 Telephone charges Depreciation of plant equipment 18,000 Production's supervisor salaries 24,000 Heating and lighting 6,400 3,200 The three production departments Cleaning, Mixing, Ferment and two service departments Store and Maintenance are housed in the new building, the details of which together with other statistics and information are given below: Department Cleaning Mixing Ferment Store Maintenance Floor area (Sq. M) 3000 1800 600 600 400 Machine value RM24000 RM10000 RM8000 RM4000 RM2000 Direct labour hours budgeted 3,200 1,800 1,000 Labour rate per hour RM3.8 RM3.5 RM3.4 RM3 RM3 Additional allocated factory overheads: Indirect materials to each department RM2,800 RM1,700 RM1,200 RM800 RM600 Service Store's apportioned 50% 25% 25% Service Maintenance's apportioned 20% 30% 50% Required: (a) Prepare a statement showing the allocation and apportionment of overheads and the reapportionment of the service department overheads. (19 marks) (b) Calculate a suitable overhead absorption rate for each production department. (6 marks) (Total=25 marks) 1