QUESTION 1 Earmax Bhd. is a company that involves in a business of manufacturing speaker for...
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QUESTION 1 Earmax Bhd. is a company that involves in a business of manufacturing speaker for home theater company. The company has three production centres namely Assembly, Machining and Finishing Department and two service centres namely Canteen and Store. The basis use for Assembly and Machining Department is machine hours and for Finishing Department, the basis use is direct labour hours. The budgeted overhead for the year ended 30th June 2022 is as follow: Total (RM) Assembly 90,000 22,000 Indirect Material Indirect Labour Rent&Rates 80,000 Supervision 15,000 cost Maintenance 37,000 cost Electricity 22,000 Insurance on 32,500 machinery Basis 65,000 Floor (sqft) Machine 22,000 value No.of employee No.of Materials requisition 20 Additional information related to the allocation of overhead is as follows: Assembly Machining Finishing Canteen area 15,000 20,000 7,500 2,500 30,000 5,000 800 2,000 Machine hours Maintenance hours Direct labour 1,500 hours 25,000 300 95,000 10 1,200 1,550 400 Machining Finishing 25,000 23,000 300 10,000 5 600 1,400 80 25,000 650 7 500 150 20 Canteen 12,000 550 2,500 5,000 5 . Store 50 200 Store 8,000 2,500 47 Total 50,000 152,000 3,100 5,150 800 3,200 Required: (a) Prepare an overhead analysis sheet (OAS) showing the cost allocation, apportionment, and re-apportionment of overhead for the five departments using the repeated distribution method. (18 marks) (b) Calculate the Overhead absorption rate (OAR) for each production centre. (6 marks) QUESTION 1 Earmax Bhd. is a company that involves in a business of manufacturing speaker for home theater company. The company has three production centres namely Assembly, Machining and Finishing Department and two service centres namely Canteen and Store. The basis use for Assembly and Machining Department is machine hours and for Finishing Department, the basis use is direct labour hours. The budgeted overhead for the year ended 30th June 2022 is as follow: Total (RM) Assembly 90,000 22,000 Indirect Material Indirect Labour Rent&Rates 80,000 Supervision 15,000 cost Maintenance 37,000 cost Electricity 22,000 Insurance on 32,500 machinery Basis 65,000 Floor (sqft) Machine 22,000 value No.of employee No.of Materials requisition 20 Additional information related to the allocation of overhead is as follows: Assembly Machining Finishing Canteen area 15,000 20,000 7,500 2,500 30,000 5,000 800 2,000 Machine hours Maintenance hours Direct labour 1,500 hours 25,000 300 95,000 10 1,200 1,550 400 Machining Finishing 25,000 23,000 300 10,000 5 600 1,400 80 25,000 650 7 500 150 20 Canteen 12,000 550 2,500 5,000 5 . Store 50 200 Store 8,000 2,500 47 Total 50,000 152,000 3,100 5,150 800 3,200 Required: (a) Prepare an overhead analysis sheet (OAS) showing the cost allocation, apportionment, and re-apportionment of overhead for the five departments using the repeated distribution method. (18 marks) (b) Calculate the Overhead absorption rate (OAR) for each production centre. (6 marks)
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