Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 2 (25 marks) Avina Bhd. operates 3 production departments X, Y and Z and two service departments A and B. Allowance is made in

QUESTION 2 (25 marks)

Avina Bhd. operates 3 production departments X, Y and Z and two service departments A and B. Allowance is made in the rates for apportionment of the costs of the two service departments the overhead costs for the year were as follows:

X Y Z A B

Indirect wages RM3,600 6,000 1,800 4,800 2,400

Repairs and maintenance RM960 RM2,160 RM360 RM240 RM120

Indirect material RM1,800 RM2,760 RM1,320 RM1,080 RM1,800

Power RM900

Rent and rates RM9,600

Lighting and heating RM6,000

Depreciation - plant RM12,000

Depreciation - fittings RM300

Insurance - plant RM2,400

Insurance - buildings RM600

The following data is available:

X Y Z A B

Effective horse

power 80 180 30 10 -

Area occupied

(sq. feet) 4,000 8,000 6,000 1,000 1,000

Value of plant

(RM) 12,500 30,000 3,750 3,750 -

Value of

fittings (RM) 2,000 1,000 4,000 2,000 1,000

Direct hours 28,800 41,000 40,400 - -

Labour cost

(RM) 41,000 60,600 48,400 - -

Machine hours 24,000 43,200 4,000 - -

The cost of service departments A and B are allocated to other departments on percentage basis below:

X Y Z A B

A 20 50 20 - 10

B 20 60 10 10 -

During the last financial year the department overhead absorption rates used were:

X 70% on departmental direct labour costs

Y RM1.50 per machine hour

Z RM0.60 per direct labour hour

Required:

(a) Prepare an overhead analysis sheet showing the distribution of overhead to the departments.

(b) Show the over or under absorption of overheads during the year.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Financial And Managerial Accounting

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura

6th Edition

0134486838, 978-0134486833

More Books

Students also viewed these Accounting questions

Question

5. Give examples of binary thinking.

Answered: 1 week ago