QUESTION 2 (20 MARKS)

A. Service costing is a costing method used to compute the costs of services rendered. Provide the most suitable basis to calculate the cost for the following services:

i) Audit (1 mark) ii) Hotel (1 mark) iii) Hospital (1 mark)

B. Cleanexstar provides a cleaning service for small offices. Cleanexstar calculates a predetermined overheads rate based on total direct labour hours. The budgeted overhead cost for Cleanexstar is RM520,000. The following related information is provided for direct labour hours. Estimated hour per worker 2,000

Estimated hour per worker 2,000 Number of worker 25Input materials 3,200 kilogram (kg) RM18 per kg Labour and overhead incurred RM12,000 Expected normal loss 7% of input