Reference no: EM132735137
Question - Soy Asahi manufactures unique-taste soy sauce according to customers' preference. It has three production departments and two service departments. Overhead costs for the coming year is as follows:
RM
Indirect materials: Cleaning department 1,000
Rent and rates 12,800
Machine insurance 6,000
Telephone charges 3,200
Depreciation of plant equipment 18,000
Production's supervisor salaries 24,000
Heating and lighting 6,400
The three production departments Cleaning, Mixing, Ferment and two service departments Store and Maintenance are housed in the new building, the details of which together with other statistics and information are given below:
Department
|
|
Cleaning
|
Mixing
|
Ferment
|
Store
|
Maintenance
|
|
Floor area (Sq. M)
|
3000
|
1800
|
600
|
600
|
400
|
|
Machine value
|
RM24000
|
RM10000
|
RM8000
|
RM4000
|
RM2000
|
|
Direct labour hours budgeted
|
3,200
|
1,800
|
1,000
|
-
|
-
|
|
Labour rate per hour
|
RM3.8
|
RM3.5
|
RM3.4
|
RM3
|
RM3
|
|
|
|
|
|
|
|
|
Additional allocated factory overheads:
|
|
|
|
|
|
|
Indirect materials to each department
|
RM2,800
|
RM1,700
|
RM1,200
|
RM800
|
RM600
|
|
|
|
|
|
|
|
|
Service Store's apportioned
|
50%
|
25%
|
25%
|
|
|
|
Service Maintenance's apportioned
|
20%
|
30%
|
50%
|
|
|
Required -
(a) Prepare a statement showing the allocation and apportionment of overheads and the reapportionment of the service department overheads.
(b) Calculate a suitable overhead absorption rate for each production department.