QUESTION 2 Osaka Sdn Bhd is a manufacturing company that has 3 production departments; Assembly, Machining and Finishing; and 2 service departments which is Store and Maintenance. The following forecast information relates to the year ended October 2018: Allocated Costs: Indirect material Assembly Machining Finishing Store Maintenance RM RM 15,000 18,000 23,000 9,000 10,500 75,500 Indirect Labour Assembly 13,000 Machining 10,000 Finishing 14,500 Store Maintenance Other Costs: 7,000 10,000 54,500 Rent on building Insurance on plant Depreciation on plant Supervisor's salary Utilities Power and heating 40,000 15,000 8,500 17,000 21,000 13,000 244,500 Additional information: Floor Area Assembly Machining Finishing 3,000 3,500 Store Maintenance Total 3,000 700 1,300 11,500 (Sq. meter) No. of 40 40 50 10 10 150 employees Kilowatt 300 400 150 50 100 1,000 hours Plant value 10,000 50,000 30,000 10,000 100,000 (RM) No. of 1,500 2,000 3,500 - 1,000 8,000 material requisitions Maintenance 600 3,500 2,000 500 hours Direct labour 10,000 5,000 15,000 hours Machine 2,000 18,000 7,000 6,600 30,000 27,000 hours Required: a) Prepare an Overhead Analysis Sheet for the year ended October 2018. b) Calculate the overhead absorption rate for each production department using the following basis of absorption: :Direct Labour Hours Assembly Machining : Machine Hours Finishing :Direct Labour Hours c) Actual results from production departments for the year 2018 were: Departments Assembly Machining Finishing Direct labour hours 10,500 4,500 16,000 Machine hours 1,900 17,800 7,100 Actual overhead (RM) 68,000 90,000 96,700 Using the overhead absorption rates in (b) above, determine over or under absorption of overheads in each department. Hang Nadim Enterprise manufactures wooden chairs for local market. The manufacturing of wooden chairs has to go through two production cost center which are Machining and Assembly department. The company also has two service cost centers namely Store and Maintenance department that support the activities of production department. For the year ended 31 December 2018, Hang Nadim Enterprise incurred the following expenses:- RM Direct material Indirect material Indirect labour Supervisor salaries Insurance of plant and machinery Power Rental Building insurance 250,000 150,000 67,000 79,000 21,000 30,000 15,000 13,000 Both indirect materials and indirect labour will be allocated based on the ratio of 30:30:20:20 to Machining, Assembly, Store and Maintenance department respectively. Other related information is as follow: Machining Cost of plant and machinery 220,000 Finishing 200,000 Store 50,000 Maintenance 30,000 Total 500,000 (RM) Horse power 500 250 100 150 Floor area (Sq. feet) 4,500 3,000 1,500 1,000 1,000 10,000 No. of material requisition 100 150 10 260 notes Maintenance hours 450 400 10 860 Direct labour hours 30,000 20,000 10,000 10,000 Machine hours 20,000 No. of employees 20 17,000 60 8,000 9,000 70,000 54,000 10 10 100 Required: a. Differentiate with an example cost apportionment and cost reapportionment. (4 marks) b. Prepare an overhead analysis sheet, showing clearly the basis for apportionment and reapportionment using repeated distribution method. (All calculations are to be rounded up to the nearest RM) (17 marks) c. Calculate the overhead absorption rate for each production cost center using the following basis. (Answer are to be rounded up to two decimal places) Machining department: Machine hours Finishing department: Direct labour hours (3 marks) d. Given below are the actual data for the year ended 31 December 2018. Departments Total overhead (RM) Direct labour hours Machine hours Machining 80,000 5,000 7,500 Finishing 60,000 6,500 8,000 By using the OAR that you have calculated in (c), calculate the under or over absorption of overhead for each production cost center. (Answer are to be rounded up to the nearest RM) QUESTION 4 Crystal Frame Berhad, which manufactures frames, has two production departments namely Machining department and Finishing department and two service departments, Store and Maintenance department. The following information relates to the company for year 2018: Allocated costs: Departments Machining (RM) Finishing Store Maintenance (RM) (RM) (RM) Direct labour 20,760 13,840 3,920 4,000 Indirect labour 11,600 9,080 3,080 3,050 Direct material 29,100 19,400 4,700 2,500 Indirect material 7,400 10,620 4,120 3,250 Other costs: RM Electricity 2,400 Insurance on machinery 1,600 Rent 24,000 Supervision 15,000 The following additional information is given: Direct Machine Number Machine Floor Material Maintenance labour hours of value area handling hour hours employees (RM) (sq. meters) (%) Machining 4,800 5,000 20 40,000 2,000 60 2,500 department Finishing 5,500 4,500 20 60,000 2,000 40 3,000 department Store 5 5,000 2,400 - 900 department Maintenance 7 7,000 1,000 20 department Required: a. Prepare an overhead analysis sheet showing the basis for apportionment made. Use Repeated Distribution Method for Reapportionment. (Answers are to be stated to the nearest RM) b. Calculate the overhead absorption rate for each production department using the following basis: - Machining department - Finishing department Machine hours Direct labour hours (Answers are to be rounded up to two decimal points) c. Given below are the actual data for the year ended 2018. Departments Total overhead (RM) Direct labour hours Machine hours Machining 54,980 5,000 4,500 Finishing 61,300 9,000 5,800 Calculate the under or over absorption of overhead for each production department. Use the departmental absorption rate you have calculated in (b) above. State possible basis of apportionment for each of the following expenses Inspection Canteen Power d. i) ii) iii) iv) Personnel