Power, a support department of Tinkle Industries, budgeted RM15,750 in fixed costs and RM0.13 per machine hour in variable costs based on 35,000 machine hours. Producing Department, A was expected to use 21,000 machine hours; Producing Department B was expected to use 14,000 machine hours. Actual fixed cost was RM16,000 and actual variable cost was RM4,254 for 35,000 machine hours. Departments A and B used 20,000 and 14,800 machine hours, respectively. Costs are assigned at the end of the year.

Required:

a. If Tinkle used a single rate to assign Power cost to Departments A and B, what would be the rate?

b. If Tinkle used a single rate to assign Power cost, calculate the total cost assigned to Department A and Department B.

c. If Tinkle used a multiple rate to assign Power cost, calculate the total cost assigned to Department A and Department B.

d. Discuss the advantages and disadvantages of using a multiple rate when applying overhead costs to departments/products.

Answer rating: 100% (QA)

Hato to ass using Cosd Pawer P... View the full answer