Ryan Corporation manufactures auto steering systems. Prime costs and machine time estimates for one unit of the product for the year follow:

Direct materials RM400

Direct labor (RM12/hour) RM300

One unit of the product requires 15 hours of direct labor in Department A and 10 hours in Department B. Also, it requires 5 machine hours in Department A and 15 machine hours in Department B. Using number of units as the activity, the factory overhead costs estimated in these two departments follows:

Factory overhead A RM 244,000

Factory overhead B RM 243,000

Management expects the firm to produce 1,000 units during the year.

Required

1. Assume that the factory overhead was applied on the basis of direct labor hours. Compute the predetermined factory overhead rate. (4 marks)

2. If factory overhead were applied on the basis of machine hours, what would be the predetermined overhead rate? (3 marks)

3. If the company produced 1,000 units during the year, what was the total amount of applied factory overhead in each department in requirements 1 and 2? (8 marks)