QUESTION House Furniture Berhad produces special quality furniture for household and office use. The manufacturing process starts with the cutting and drilling of the wood using high technology machines in the Cutting and Drilling Department. This is followed by the assembling process which is done by the experienced and skilled craftsmen in the Assembly Department using mainly the traditional manual method of production. Expert craftsmen are also employed in the Finishing Department whose job is to inspect each furniture item before they are packed and transferred to the storeroom. The production departments are supported by two service departments: Material Handling and Maintenance. The following budgeted data for the year ended 31 December 2021 is given: Maintenance Total (RM) Assembly Finishing Material Department Department handling Cutting & Drilling Department (RM) 322,350 (RM) 92,100 (RM) 46,050 (RM) (RM) 460,500 69,320 45,435 10,485 7,000 6,400 662,500 211,700 96,250 42,340 254,250 52.925 312,000 63,510 31,755 Direct material Indirect material Direct wages Indirect wages Depreciation of machines Insurance on building Utilities 21,170 16,300 68,100 36,000 Maintenance Assembly Finishing Department Department Material handling 52,000 500 Additional information: Cutting & Drilling Department Direct labour hours 18,000 Machine hours 15,000 Maintenance hours 150 Material handling 50% service ratios Book value of 150,000 machines (RM) Floor area (square 2,000 metres) 42,000 1,000 20 30% 1,200 20 15% 5% 5,000 2,000 6,000 1,400 1,000 800 800 The company uses repeated distribution method for allocation of costs from service departments to production departments. The actual costs and activities of the company are as follows: Cutting & Drilling Assembly Department Department Total overheads (RM) 202,833 107,632 Direct labour hours 18,400 40,600 Direct labour cost (RM) 97,600 235,000 Machine hours 15,800 1,100 Finishing Department 107,241 53,500 330,000 550 b) Calculate the Overhead Absorption Rate (CAR) for each the production department using the following basis: Cutting & Drilling Department - Machine hours Assembly Department - Direct labour hours Finishing Department - Direct wages (Answers are to be rounded up to two decimal points) (7 marks)