QUESTION 1 Rose Leather Berhad produces a variety of leather products. Given below are the many types of costs incurred for the first quarter of 2021. Types of costs 1 Direct material costs 8 Rental of special equipment 2 Salary of production workers 9 Factory Power and electricity cost 3 Salary of sup

QUESTION 1

 Rose Leather Berhad produces a variety of leather products. Given below are the many types of costs incurred for the first quarter of 2021.

Types of costs
1Direct material costs8Rental of special equipment
2Salary of production workers9Factory Power and electricity cost
3Salary of supervisors10Designer fee
4Advertisement expenses11Administration cost
5Depreciation of sewing machines & equipment12Depreciation of office equipment
6Salesman commission13Maintenance cost of machine
7Factory building insurance14Insurance of office building

Required:

For each overhead costs below, state any four (4) examples from the above table.

1. Production overhead cost

2. Non-production overhead costs

QUESTION 2

 State the appropriate basis for the following activities:

ActivitiesAppropriate Basis
aBasis for apportionment of electricity costs
bBasis for apportionment of insurance of building cost
cBasis for reapportionment of overhead costs at the Store Room department
dBasis for reapportionment of overhead costs at the Maintenance department
eBasis for apportionment of building rental cost
fBasis for apportionment of Supervisors salaries cost
gBasis for reapportionment of overhead costs at the Canteen department
hBasis for reapportionment of overhead costs at Quality Control Department

QUESTION 3

Aiden Enterprise has two production departments, Mixing Department and Packaging Department.

MixingDepartmentPackagingDepartment
Budgeted Production Overhead costsRM 250,000RM 360,000
Actual production Overhead costsRM 320,000RM 300,000
Budgeted machine hours47,250 hours1,000 hours
Actual machine hours45,000 hours1,500 hours
Budgeted Labour hours4,500 hours15,000 hours
Actual labour hours5,000 hours13,800 hours
Budgeted direct wages costRM159,000RM200,000
Actual direct wages costRM120,000RM 250,000
Budgeted direct material costRM88,000RM15,000
Actual direct material costRM80,000RM18,000
Budgeted units of production10,000 units

Required:

 1. Assuming that Mixing Department uses more machine for production. Calculate the overhead absorption rate (OAR) for Mixing Department using the most appropriate

2. Assuming that Packaging Department are uses labour intensively for Calculate the overhead absorption rate (OAR) for Packaging Department using the most appropriate basis.

3. Calculate the SINGLE / BLANKET overhead absorption rate using the percentage of prime cost

4. Based on your answer in (a), determine the over or under absorption of the overhead cost for Mixing

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