ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has...

 

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ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has three (3) production departments; Department A, Department B and Department C. Department A and Department C are labour oriented, while Department B is 95% machine oriented. ZC Phone Manufacturing also has two (2) service departments, namely Maintenance and Store. The company forecasts the following costs for the year ended March 2018. Cost element Direct labour Indirect material Indirect labour Other overhead cost Rent & rates Depreciation of plant & Machinery Power Required: b) Total RM 15,000 350,000 20,000 250,000 Additional information: c) 35,000 120,000 20,000 Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Dept A RM 5,500 85,000 7,500 75,000 Dept A 60 155,000 55 500 20% 25,000 80,000 20% Dept B RM 2,000 75,000 Total overhead Direct labour hours Machine hours 3,000 60,000 Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Dept C RM 4,000 68,000 6,000 60,000 Dept. A RM352,000 79,000 34,000 Dept C 30 100,000 60 500 20% 35,000 85,000 20% Given below are the actual data for the year ended March 2018. Maintenance RM 2,200 65,000 Maintenance 15 Departments Dept. B RM290,000 25,000 68,000 2,000 30,000 Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points). 100,000 5 50 10% Store RM 1,300 57,000 Dept. C RM278,000 83,000 25,000 1,500 25,000 Store 20 119,000 10 150 10% Calculate the under or over absorption of overhead for each production. Use the departmental absorption rate you have calculated in (b) above. ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has three (3) production departments; Department A, Department B and Department C. Department A and Department C are labour oriented, while Department B is 95% machine oriented. ZC Phone Manufacturing also has two (2) service departments, namely Maintenance and Store. The company forecasts the following costs for the year ended March 2018. Cost element Direct labour Indirect material Indirect labour Other overhead cost Rent & rates Depreciation of plant & Machinery Power Required: b) Total RM 15,000 350,000 20,000 250,000 Additional information: c) 35,000 120,000 20,000 Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Dept A RM 5,500 85,000 7,500 75,000 Dept A 60 155,000 55 500 20% 25,000 80,000 20% Dept B RM 2,000 75,000 Total overhead Direct labour hours Machine hours 3,000 60,000 Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Dept C RM 4,000 68,000 6,000 60,000 Dept. A RM352,000 79,000 34,000 Dept C 30 100,000 60 500 20% 35,000 85,000 20% Given below are the actual data for the year ended March 2018. Maintenance RM 2,200 65,000 Maintenance 15 Departments Dept. B RM290,000 25,000 68,000 2,000 30,000 Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points). 100,000 5 50 10% Store RM 1,300 57,000 Dept. C RM278,000 83,000 25,000 1,500 25,000 Store 20 119,000 10 150 10% Calculate the under or over absorption of overhead for each production. Use the departmental absorption rate you have calculated in (b) above.

Answer rating: 100% (QA)

SOLUTION B C For dept A and C direct labour ... View the full answer