QUESTION 3 PART A AdLine Berhad designs and produces walk-in wardrobes on a Just-in-Time (JIT) inventory basis. The carpentry company allows customers to choose from several design options that can be customised to use different wood flooring forms: timber, laminated wood and engineered wood. When a customer orders a wardrobe with either laminated wood flooring or engineered wood flooring, it will be built into the customer's room within a month. But when a customer orders a wardrobe with timber flooring, the wardrobe will be completed within three months. All orders are priced at 35% on full product costs. The company uses a traditional job order costing system to allocate its manufacturing overhead. The cost will be allocated to each option based on the direct labour costs required. The approach is based on the assumption that the more expensive wardrobes with timber flooring would require more overhead costs because of its specialised labour. The budgeted costs and order data of the three possible wardrobe options for the first six months of 2021 are presented as follows: Wardrobe, Engineere d Flooring Wardrobe, Timber Flooring Wardrob e, Laminate d Flooring 80 Volume (orders) 15 7 Direct materials Flooring Panels boards and frames Glass and mirrors RM120 RM80 RM160 RM40 RM20 0 RM60 RM40 0 Direct labour (per order) Design time (RM12/hour) Production time (RM20/hour) 70 hours 90 hours 80 hours 80 hours 100 hours 140 hours TXF/NMH/MM 6/1 BAC1624 MANAGEMENT ACCOUNTING 1 15 JANUARY 2021 Manufacturing Overhead Supervisory salaries Factory rent Equipment rent Utilities Insurance Information technology infrastructure Building maintenance Equipment maintenance RM 36,000 127,200 50,000 20,000 10,000 50,000 8,160 4,000 Required: a) Compute and interpret the predetermined manufacturing overhead rate for the first six months of 2021. (3 marks) b) What are the total manufacturing overhead costs to be allocated (assigned) to the three wardrobe options? (3 marks) c) Determine the unit product cost for each of the three wardrobe options in the first six months of 2021. (6 marks) d) What is the expected total gross profit for the first six months for 2021? (3 marks) e) What are FIVE(5) possible implications of using a Just-in-Time (JIT) inventory basis for the company? (5 marks) [TOTAL 20 MARKS] Continued... TXFNMH/MM 811 BAC162 MANAGEMENT ACCOUNTING 1 15 JANUARY 2021 PART B Glaze Sdn. Bhd. is a jeweller, specialising in custom-made rings. On 1 December 2020, raw materials inventory totalled at RM1,500; and, work-in-process inventory totalled at RM2,500 for Job Alia. Overhead costs for December 2020 is estimatedat RM1,400. The following information are available for December: 05/12 RM10,200 of raw materials were purchased on account. RM200 of the materials purchased were for indirect materials. 23/12 RM4,000 of employee salary costs were incurred. Of this amount, RM1,400 were related to direct labour and RM1,200 were related to indirect labour. The balance of the accrued amount are meant for the sales manager's salary. 31/12 Depreciation on office equipment is charged at RM2,500. Various other manufacturing overhead costs were incurred on account for RM1,200. A summary of source documents for December are as follows: GLAZE SDN. BHD. Material Requisition Slip December 2020 Date Job/Remarks Amoun t (RM) 02/12 Alia 800 05/12 Bala 1,200 10/12 Chan 1,500 12/12 General Use 1,000 15/12 Bala 3,000 20/12 Daron 4,000 Approved by: Jackson Wang - Store Manager Employee No. DL001 DL003 DL002 Jackson DL003 DL001 Date Amoun t(RM) 02/12 05/12 10/12 15/12 20/12 24/12 GLAZE SDN. BHD. Monthly Time Ticket December 2020 Job/Remarks Employee Hour No. S (DLH) Alia DL001 8 Bala DL003 8 Chan DL002 8 Bala DL003 8 Daron DL001 8 General- cleaner 300 200 200 400 300 1,200 ued