Homework Help is Here – Start Your Trial Now!
Business
Accounting
QUESTION 2 Seroja Sdn. Bhd. manufactures customized equipment for local market. The budgeted data for the month of February 2019 were as follows: Machining Department Finishing Department Manufacturing overhead RM40,000 RM65,000 Direct labour hours 2,000 hours 10,000 hours Machine hours 4,000 hours 5,700 hours During the month, an order was received from Mr. Eric to manufacture an equipment for his personnel use. The job is known as Job E and the data pertaining to the job were as follows: Machining Department Finishing Department RM1,200 50 hours Direct material RM2,800 Direct labour hours Machine hours 500 hours 300 hours 200 hours Wage rate per hour RM2.50 RM3,20 Additional information about Job E: 1. Manufacturing overhead is absorbed based on machine hour for Machining department and direct labour hour for Finishing department. 2. Administrative expenses incurred for Job E was 15% of prime cost 3. The company set the profit margin of 25% on total cost for Job E. At the end of the month the actual data were obtained as follows: Machining Department Finishing Department RM72,000 9,800 hours 6,200 hours Manufacturing overhead RM35,000 Direct labour hours 1,650 hours Machine hours 3.700 hours Required: a. Calculate overhead absorption rate for both departments using: i) Single rate (assuming the company uses direct labour hour as absorption basis). ii) Departmental rate b. Prepare the job cost sheet of Job E by showing the prime cost, total production cost and total cost. c. Calculate the selling price of Job E.

QUESTION 2 Seroja Sdn. Bhd. manufactures customized equipment for local market. The budgeted data for the month of February 2019 were as follows: Machining Department Finishing Department Manufacturing overhead RM40,000 RM65,000 Direct labour hours 2,000 hours 10,000 hours Machine hours 4,000 hours 5,700 hours During the month, an order was received from Mr. Eric to manufacture an equipment for his personnel use. The job is known as Job E and the data pertaining to the job were as follows: Machining Department Finishing Department RM1,200 50 hours Direct material RM2,800 Direct labour hours Machine hours 500 hours 300 hours 200 hours Wage rate per hour RM2.50 RM3,20 Additional information about Job E: 1. Manufacturing overhead is absorbed based on machine hour for Machining department and direct labour hour for Finishing department. 2. Administrative expenses incurred for Job E was 15% of prime cost 3. The company set the profit margin of 25% on total cost for Job E. At the end of the month the actual data were obtained as follows: Machining Department Finishing Department RM72,000 9,800 hours 6,200 hours Manufacturing overhead RM35,000 Direct labour hours 1,650 hours Machine hours 3.700 hours Required: a. Calculate overhead absorption rate for both departments using: i) Single rate (assuming the company uses direct labour hour as absorption basis). ii) Departmental rate b. Prepare the job cost sheet of Job E by showing the prime cost, total production cost and total cost. c. Calculate the selling price of Job E.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter5: Product And Service Costing: Job-order System
Section: Chapter Questions
Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...
See similar textbooks
icon
Related questions
icon
Concept explainers
Question
QUESTION 2 Seroja Sdn. Bhd. manufactures customized equipment for local market. The budgeted data for the month of February 2019 were as follows: Machining Department Finishing Department Manufacturing overhead RM40,000 RM65,000 10,000 hours 5.700 hours Direct labour hours 2.000 hours Machine hours 4.000 hours During the month, an order was received from Mr. Eric to manufacture an equipment for his personnel use. The job is known as Job E and the data pertaining to the job were as follows: Machining Department Finishing Department RM2,800 Direct material RM1,200 50 hours Direct labour hours Machine hours Wage rate per hour 500 hours 300 hours 200 hours RM2.50 RM3,20 Additional information about Job E: 1. Manufacturing overhead is absorbed based on machine hour for Machining department and direct labour hour for Finishing department. 2. Administrative expenses incurred for Job E was 15% of prime cost 3. The company set the profit margin of 25% on total cost for Job E. At the end of the month the actual data were obtained as follows: Machining Department Finishing Department RM35,000 Manufacturing overhead 1,650 hours 3,700 hours RM72,000 9,800 hours 6,200 hours Direct labour hours Machine hours Required: a. Calculate overhead absorption rate for both departments using: i) Single rate (assuming the company uses direct labour hour as absorption basis). ii) Departmental rate b. Prepare the job cost sheet of Job E by showing the prime cost, total production cost and total cost. c. Calculate the selling price of Job E. d. Based on your answer in a. ii) above, calculate over or under absorption of overhead for each department.
Transcribed Image Text:QUESTION 2 Seroja Sdn. Bhd. manufactures customized equipment for local market. The budgeted data for the month of February 2019 were as follows: Machining Department Finishing Department Manufacturing overhead RM40,000 RM65,000 10,000 hours 5.700 hours Direct labour hours 2.000 hours Machine hours 4.000 hours During the month, an order was received from Mr. Eric to manufacture an equipment for his personnel use. The job is known as Job E and the data pertaining to the job were as follows: Machining Department Finishing Department RM2,800 Direct material RM1,200 50 hours Direct labour hours Machine hours Wage rate per hour 500 hours 300 hours 200 hours RM2.50 RM3,20 Additional information about Job E: 1. Manufacturing overhead is absorbed based on machine hour for Machining department and direct labour hour for Finishing department. 2. Administrative expenses incurred for Job E was 15% of prime cost 3. The company set the profit margin of 25% on total cost for Job E. At the end of the month the actual data were obtained as follows: Machining Department Finishing Department RM35,000 Manufacturing overhead 1,650 hours 3,700 hours RM72,000 9,800 hours 6,200 hours Direct labour hours Machine hours Required: a. Calculate overhead absorption rate for both departments using: i) Single rate (assuming the company uses direct labour hour as absorption basis). ii) Departmental rate b. Prepare the job cost sheet of Job E by showing the prime cost, total production cost and total cost. c. Calculate the selling price of Job E. d. Based on your answer in a. ii) above, calculate over or under absorption of overhead for each department.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
SEE MORE TEXTBOOKS