QUESTION 2 PART A

Soo Seng Engineering Sdn Bhd manufactures outboard motors for motor boats. The company uses a standard cost system for its production and control. The standard cost for the outboard motors is as follows:

The company's budgeted production is 60,000 units. Standard overhead rates are computed based on the budgeted units and measured in standard direct labour hours where applicable.

RM Direct materials (6.0 Ibs @ RM 5.00) 30.00 Direct labor (1.6 hours @) RM 12.00) 19.20 Variable manufacturing overhead (1.6 hours @ RM 10.00) 16.00 Fixed manufacturing overhead (1.6 hours @ RM 6.00) 9.60 Standard Unit Cost 74.80