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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 Total RM 15,000 350,000 Dept A RM 5,500 85,000 Dept B RM 2,000 Dept C RM 4,000 68,000 Maintenance RM 2,200 Store RM 1,300 Direct labour Indirect material Indirect labour 75,000 65,000 57,000 20,000 7,500 3,000 1,500 25,000 6,000 2,000 30,000 Other 250,000 75,000 60,000 60,000 overhead cost Rent & rates 35,000 Depreciation of plant & Machinery Power 120,000 20,000 Additional information: Dept A 60 155,000 Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Dept C 30 100,000 60 500 20% 35,000 85,000 20% Maintenance 15 100,000 Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) 55 500 20% 25,000 80,000 20% Store 20 119,000 10 150 10% 50 10% Required: b) Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points). c) Given below are the actual data for the year ended March 2018. Departments Dept. B RM290,000 25,000 Dept. A RM352,000 Dept. C RM278,000 Total overhead 83,000 25,000 Direct labour hours 79,000 34,000 Machine hours 68,000 Calculate the under or over absorption of overhead for each production. Use the denartmental absorntion rate vou have calculated in (h) 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 Total RM 15,000 350,000 Dept A RM 5,500 85,000 Dept B RM 2,000 Dept C RM 4,000 68,000 Maintenance RM 2,200 Store RM 1,300 Direct labour Indirect material Indirect labour 75,000 65,000 57,000 20,000 7,500 3,000 1,500 25,000 6,000 2,000 30,000 Other 250,000 75,000 60,000 60,000 overhead cost Rent & rates 35,000 Depreciation of plant & Machinery Power 120,000 20,000 Additional information: Dept A 60 155,000 Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Dept C 30 100,000 60 500 20% 35,000 85,000 20% Maintenance 15 100,000 Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) 55 500 20% 25,000 80,000 20% Store 20 119,000 10 150 10% 50 10% Required: b) Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points). c) Given below are the actual data for the year ended March 2018. Departments Dept. B RM290,000 25,000 Dept. A RM352,000 Dept. C RM278,000 Total overhead 83,000 25,000 Direct labour hours 79,000 34,000 Machine hours 68,000 Calculate the under or over absorption of overhead for each production. Use the denartmental absorntion rate vou have calculated in (h) above

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 8E: A manufacturing company has two service and two production departments. Building Maintenance and...
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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 Total RM 15,000 350,000 Dept A RM 5,500 Dept B RM 2,000 75,000 Dept C RM 4,000 Maintenance RM 2,200 65,000 Store RM 1,300 57,000 Direct labour Indirect material Indirect labour Other overhead cost Rent & rates 85,000 68,000 20,000 3,000 60,000 2,000 1,500 25,000 7,500 6,000 60,000 250,000 75,000 30,000 35,000 Depreciation of plant & Machinery Power 120,000 20,000 Additional information: Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Dept C 30 Dept A 60 155,000 55 500 20% 25,000 80,000 20% Maintenance Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Store 20 119,000 10 150 10% 15 100,000 100,000 60 500 20% 35,000 85,000 20% 50 10% Required: b) Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points). c) Given below are the actual data for the year ended March 2018. Departments Dept. B RM290,000 Dept. C RM278,000 83,000 Dept. A RM352,000 Total overhead Direct labour hours 79,000 34,000 25,000 Machine hours 68,000 25,000 Calculate the under or over absorption of overhead for each production. Use the departmental absorption rate you have calculated in (b) above.
Transcribed Image Text: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 Total RM 15,000 350,000 Dept A RM 5,500 Dept B RM 2,000 75,000 Dept C RM 4,000 Maintenance RM 2,200 65,000 Store RM 1,300 57,000 Direct labour Indirect material Indirect labour Other overhead cost Rent & rates 85,000 68,000 20,000 3,000 60,000 2,000 1,500 25,000 7,500 6,000 60,000 250,000 75,000 30,000 35,000 Depreciation of plant & Machinery Power 120,000 20,000 Additional information: Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Dept C 30 Dept A 60 155,000 55 500 20% 25,000 80,000 20% Maintenance Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Store 20 119,000 10 150 10% 15 100,000 100,000 60 500 20% 35,000 85,000 20% 50 10% Required: b) Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points). c) Given below are the actual data for the year ended March 2018. Departments Dept. B RM290,000 Dept. C RM278,000 83,000 Dept. A RM352,000 Total overhead Direct labour hours 79,000 34,000 25,000 Machine hours 68,000 25,000 Calculate the under or over absorption of overhead for each production. Use the departmental absorption rate you have calculated in (b) above.
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