HighFum Sdn Bhd manufactures wood and rattan furniture. The company has three production departments, namely Designing...

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HighFum Sdn Bhd manufactures wood and rattan furniture. The company has three production departments, namely Designing & Cutting. Assembly and Finishing and two service departments: Stores and Maintenance. The estimated overhead costs for the year ended 2021 were as follows: Depreciation on machine and equipment Insurance on building Insurance on machine and equipment Utilities Power Supervisors' salaries Indirect materials: Design & Cutting Assembly Finishing Stores Maintenance Indirect labour: Design & Cutting Assembly Finishing Stores Maintenance Machine hours Area (sq. feet) Book value of machine and equipment (RM) No. of material requisition No. of employees Kilowatt hour (kWh) Direct labour hours Labour rate per hour (RM) % of service from: Stores Maintenance 25,000 12,000 10,000 Total 1,727,000 At the beginning of the year, the company's management made the following forecasts: Designing Assembly Finishing Stores Maintenance & Cutting 25,000 3,000 200,000 60 25 1,000 60.000 8 30% 40% 20,000 2,500 180,000 40 35 800 80,000 7 30% 30% RM 180,000 250,000 210,000 220,000 300,000 380,000 238 5.000 2,500 1,500 60,000 20 20,000 25,000 18,000 10,000 15,000 80,000 25 22,000 30,000 35% 25% 900 70,000 6.50 5 200 5% The overhead absorption basis for the production department is as follows: Departments Basis Designing & cutting Machine hours Assembly Direct labour costs (RM) Finishing Direct labour hours 500 80,000 10 10 100 5% Required: a. Prepare the Overhead Analysis Sheet for the company. Re-apportion the overhead costs of service departments to the production department using direct method. All calculations are to be rounded up to the nearest RM. b. i. ii. (14 marks) Compute the pre-determined overhead rate for production departments. (3 marks) At the end of the year, the company's record showed that the actual machine hours incurred by the Designing & Cutting Department was 25,500 and the actual direct labour hours incurred by the Assembly Department and the Finishing Department were 75,000 and 67,000 hours respectively. Compute the over or under absorption of overhead by each department. (3 marks) (Total: 25 marks) HighFum Sdn Bhd manufactures wood and rattan furniture. The company has three production departments, namely Designing & Cutting. Assembly and Finishing and two service departments: Stores and Maintenance. The estimated overhead costs for the year ended 2021 were as follows: Depreciation on machine and equipment Insurance on building Insurance on machine and equipment Utilities Power Supervisors' salaries Indirect materials: Design & Cutting Assembly Finishing Stores Maintenance Indirect labour: Design & Cutting Assembly Finishing Stores Maintenance Machine hours Area (sq. feet) Book value of machine and equipment (RM) No. of material requisition No. of employees Kilowatt hour (kWh) Direct labour hours Labour rate per hour (RM) % of service from: Stores Maintenance 25,000 12,000 10,000 Total 1,727,000 At the beginning of the year, the company's management made the following forecasts: Designing Assembly Finishing Stores Maintenance & Cutting 25,000 3,000 200,000 60 25 1,000 60.000 8 30% 40% 20,000 2,500 180,000 40 35 800 80,000 7 30% 30% RM 180,000 250,000 210,000 220,000 300,000 380,000 238 5.000 2,500 1,500 60,000 20 20,000 25,000 18,000 10,000 15,000 80,000 25 22,000 30,000 35% 25% 900 70,000 6.50 5 200 5% The overhead absorption basis for the production department is as follows: Departments Basis Designing & cutting Machine hours Assembly Direct labour costs (RM) Finishing Direct labour hours 500 80,000 10 10 100 5% Required: a. Prepare the Overhead Analysis Sheet for the company. Re-apportion the overhead costs of service departments to the production department using direct method. All calculations are to be rounded up to the nearest RM. b. i. ii. (14 marks) Compute the pre-determined overhead rate for production departments. (3 marks) At the end of the year, the company's record showed that the actual machine hours incurred by the Designing & Cutting Department was 25,500 and the actual direct labour hours incurred by the Assembly Department and the Finishing Department were 75,000 and 67,000 hours respectively. Compute the over or under absorption of overhead by each department. (3 marks) (Total: 25 marks)

Answer rating: 100% (QA)

Solution a Allocation of Cost using Direct Method Reapportion of Overhead Cost of Service Departments Designing Assembl Finishin Stores Maintena Cutting Particulars Basis of Allocation Ratio y g Depreciation on Machine Equipment Insurance on Building Insurance on Machine Equipment Utilities Power Supervisors Salary Indirect Material Indirect Labour Total Cost Reallocation of Stores Reallocation of Maintenance Total Cost Total Cost 180000 Book Value of Machine Equipment 250000 Area Sq Feet 210000 Book Value of Machine Equipment Department ... View the full answer