Question: (18 marks) b) Calculate the overhead absorption rate for each of the production departments by using the appropriate basis of absorption. (round up your

(18 marks) b) Calculate the overhead absorption rate for each of the

(18 marks) b) Calculate the overhead absorption rate for each of the production departments by using the appropriate basis of absorption. (round up your answer to two decimal places) (2 marks) c) Calculate the over or under absorption of overhead for each production department. (Round up your answer to the nearest RM). The actual information regarding the overhead cost and activities are provided below: Total overhead(RM) Direct labour hours Machine hours Mixing RM 180,000 40,000 2,000 Packaging RM 136,000 3,000 36,000 (4 marks) d) State ONE (1) suitable overhead cost for the respective basis below: a. Floor area (sq feet) b. Number of employees c. Book value of office equipment d. Light point (4 marks) e) Explain why pre-determined overhead absorption rate are preferred to actual overhead absorption rate. (2 marks) (Total: 30marks)

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