Determine the total cost of Jobs No. 223 and No. 224. iii. Actual data for 2019 for each department are as follows: Fabrication Assembly Machine hours 61,600 31,600 Direct labour hours 25,900 165,000 Departmental overhead RM770,000 RM600,000 Calculate the amount of underapplied or overapplied overhead for each department for the year ended 31 December 2020. Notes: All computations round up to two decimal places.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Ceria Cubicles a furniture manufacturer, has two departments, Fabrication and Assembly. This company is using job order costing system for all jobs that need to go through each department.
Fabrication Assembly
Machine hours 65,000 21,000
Direct labour hours 20,200 220,000
Departmental overhead RM800,000 RM880,000
Two jobs completed during 2019 were No. 223 and No. 224. The job order cost sheets showed the following information about these jobs:
No. 223 No. 224
Direct material cost RM60,250 RM75,600
Direct labour hours - Fabrication 450 230
Machine hours - Fabrication 900 450
Direct labour hours - Assembly 425 200
Machine hours - Assembly 54 23
Direct labour workers are paid RM15 per hour in the Fabrication Department and RM10 per hour in Assembly.
Required:
i. Compute the predetermined overhead rates for both Fabrication Department and Assembly Department for 2019.
ii. Determine the total
iii. Actual data for 2019 for each department are as follows:
Fabrication Assembly
Machine hours 61,600 31,600
Direct labour hours 25,900 165,000
Departmental overhead RM770,000 RM600,000
Calculate the amount of underapplied or overapplied overhead for each department for the year ended 31 December 2020.
Notes: All computations round up to two decimal places.
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