Duri Sdn Bhd produces two wooden products known as Jati 1 and Jati 2. Each product started in the Machining department and completed in the Finishing department. There are also two service departments, canteen and maintenance in the factory. During the period just ended, actual overhead costs were as follows:

	Total(RM)	Machining	Finishing	Canteen	Maintenance
Allocated overhead(RM)	105,000	48,750	30,000	11,250	15,000
Depreciation on equipment(RM)	31,875
Rent, rates and electricity(RM)	16,350

Additional information:

a)     Background of departments

	Total(RM)	Machining	Finishing	Canteen	Maintenance
Cost of equipment(RM)	159,375	75,000	46,875	11,250	26,250
Floor area(Sq metres)	8,100	2,700	1,800	1,350	2,250
Number of employees	50	20	20	5	5
Machine hours(MH)	36,900	36,900	-	-	-
Direct labour cost(RM)	40,000	4,000	36,000	-	-

 

b)     The service departments overhead cost are re- apportioned as follows:

Canteen                                    - Number of employees

Maintenance                            - 80% for Machining Dept, 20% for Finishing  Dept 

You are required to:

1)     Prepare overhead analysis sheet and calculate the overhead rates assuming Machining Department  uses machine hours and Finishing department uses percentage of direct labour costs.                

2)     The following list and date relates to the making of a unit of product Jati 1 .

	Jati 1
Direct material cost(RM)	200
Direct labour cost:
Machining Department(RM)	100
Finishing Department (RM)	80
Machine hour (MH)	5

 

Calculate production cost for Jati 1.

3)     Given the actual overhead for Machining department and Finishing Department as RM105,300 and RM109,000 respectively, calculate the over or under absorption of overhead for the  two department if the actual machine hours is 40,000 and the actual direct labour cost for Finishing Department is RM70,000 .

Answer rating: 100% (QA)

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