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Woodstock Sdn. Bhd. (WSB) uses a normal job order costing system. There are two departments, Manufacturing and Assembly, through which most jobs pass. Selected budgeted
Woodstock Sdn. Bhd. (WSB) uses a normal job order costing system. There are two departments, Manufacturing and Assembly, through which most jobs pass. Selected budgeted and actual data for the previous year as follow: Manufacturing Assembly Budgeted overhead RM900.000 RM600,000 Actual overhead RM500,000 RM200,000 Expected direct labour hours 150,000 hours 25,000 hours Expected machine hours 25,000 hours 125,000 hours During the year, several jobs were completed. Data pertaining to of the job, Job No. 123 are as follows: Direct materials RM630.000 Direct labour cost: Manufacturing (4,000 hours @ RM14 per hour) RM56.000) Assembly (300 hours @ RM12 per hour) RM4,800 Machine hours used: Manufacturing 120 hours Assembly 1,100 hours Units produced 20,000 units Required: a) Calculate overhead absorption rate (CAR) for each department. Use direct labour hours for manufacturing and machine hours for assembly. (4 marks) b) Using the above OAR, compute per unit manufacturing cost for Job No. 123. (Note: Round the unit cost to the nearest cent). (6 marks) c) Recalculate the unit manufacturing cost for Job No. 123 using blanket overhead rate (use direct labour hours)
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