IKAR, a small home furniture factory, operates with THREE production departments: Assembly, Polishing, and Packing and TWO service departments: Stores and Maintenance. For the forthcoming period, the total budgeted overhead costs are as follows: Allocated costs: Departments Indirect materials (RM) Indirect labor (RM) Assembly Polishing Packing Stores 3,800 4,630 2,120 900 9,900 8,180 6,200 4,760 5,800 Maintenance 120

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Chapter1: Financial Statements And Business Decisions
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IKAR, a small home furniture factory, operates with THREE production departments: Assembly,
Polishing, and Packing and TWO service departments: Stores and Maintenance. For the forthcoming
period, the total budgeted overhead costs are as follows:
Allocated costs:
Departments
Indirect materials (RM)
Indirect labor (RM)
Assembly
Polishing
Packing
Stores
3,800
4,630
2,120
900
9,900
8,180
6,200
4,760
5,800
Maintenance
120
The following factory overheads were obtained from the accounts relating to the period:
RM
20,180
36,000
56,000
29,000
5,830
7,600
15,000
21,000
Heating and lighting
Rent and rate
Production supervision
Plant depreciation
Lubricant
Office depreciation
Direct labour
Direct materials
The following information is also available:
Department
Assembly
Polishing
Packing
Stores
Maintenance
Number of Employees
Floor Area (sq. metr.)
20
12
1150
1800
1250
1350
350
Machine hours
1200
2140
60
Direct labour hours
120
30
50
Plant's values (*000RM)
210
190
50
13
17
Required:
Prepare an overhead analysis statement showing the allocation and apportionment of overheads to the
departments.
Transcribed Image Text:IKAR, a small home furniture factory, operates with THREE production departments: Assembly, Polishing, and Packing and TWO service departments: Stores and Maintenance. For the forthcoming period, the total budgeted overhead costs are as follows: Allocated costs: Departments Indirect materials (RM) Indirect labor (RM) Assembly Polishing Packing Stores 3,800 4,630 2,120 900 9,900 8,180 6,200 4,760 5,800 Maintenance 120 The following factory overheads were obtained from the accounts relating to the period: RM 20,180 36,000 56,000 29,000 5,830 7,600 15,000 21,000 Heating and lighting Rent and rate Production supervision Plant depreciation Lubricant Office depreciation Direct labour Direct materials The following information is also available: Department Assembly Polishing Packing Stores Maintenance Number of Employees Floor Area (sq. metr.) 20 12 1150 1800 1250 1350 350 Machine hours 1200 2140 60 Direct labour hours 120 30 50 Plant's values (*000RM) 210 190 50 13 17 Required: Prepare an overhead analysis statement showing the allocation and apportionment of overheads to the departments.
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