Vignesh is the accountant in Muthu Curry Sdn.Bhd where the manufacturing operation is made up of three production departments and two service departments. The Mixing and Blending departments are highly automated while the Packaging Department is highly dependent on labour.

The overheads budgeted for the company are tabulated below:

	Production Departments RM			Service Departments RM
Allocated Overheads:	Mixing	Blending	Packaging	Repairs	R&D
Salaries	20,000	10,000	30,000	20,000	30,000
Consumables	10,000	5,000	10,000	6,000	4,000
Transport	5,000	5,000	5,000	4,000	6,000

In addition, the following overheads are budgeted but all departments consume them and have to be apportioned using suitable basis from the information provided:

Rental RM 160,000

Insurance of Assets RM 100,000

Canteen Subsidy RM 40,000

	Floor Area (Sq. Meter)	NBV of Assets	Head Count	Machine Hours	Direct Labour Hours
Mixing	80,000	1,500,000	180	3,000	1,000
Blending	50,000	500,000	120	2,000	1,000
Packaging	30,000	300,000	50	1,000	12,000
Repairs	20,000	-	10	-	-
R&D	20,000	200,000	40	-	-
Total	200,000	2,500,000	400	6,000	14,000

You are required to:

1. Prepare an overhead analysis to establish the budgeted total departmental overhead for each production departments. The service departments budgeted overheads are to be apportioned (shared) equally among other departments.

2. Calculate for each department, the pre-determined Departmental Overhead Absorption rate. The Mixing

and Blending department is absorbed based on Machine hours while the Packing department is based

on labour hours.

c. Estimate the total production cost for the Cap Burung a new product based on the following information:

(you are required to use only the departmental absorption rates)

Prime Cost RM 450

Labour (RM10/hr)

in Mixing Department 2 hour

in Blending Department 2 hour

in Packaging Department 5 hour

Machining Time

in Mixing Department 4 hours

in Blending Department 3 hours