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Jingga Sdn Bhd has three production departments - Machining, Assembly and Finishing; and two service departments - Maintenance and Store. The company has produced the following budgeted overhead costs for the year 2023: Allocated costs Insurance of Building Insurance of Machinery Rent on factory General supervision Electricity (lighting) Electricity (power Depreciation of Machinery Other information in respect of the departments is as follows: Machining Assembly Finishing Departments Allocated Costs (RM) Value of Machinery (RM) Kilowatt hours Number of employees Area occupied (square meters) Machine hours 36,000 30,000 38,000 20 500 60,000 12,000 24,000 15,000 20,000 40 600 30,000 60,000 30,000 5,000 12,000 50 800 10,000 30,000 Direct labour hours Cost of the service departments should be apportioned as follows: Service Departments Production Departments Assembly 20% 25% RM 120,000 96,000 30,000 48,000 74,400 18,000 64,800 72,000 Maintenance Store 18,000 Machining department - machine hours Assembly department - labour hours Finishing department - labor hours 3. Explain the term 'over absorbed' and 'under absorbed' of overhead 5,000 8,000 10 400 12,000 5,000 2,000 5 400 Machining 40% 45% Finishing 40% Maintenance Store 30% 1. Prepare an overhead analysis statement to show the overhead costs budgeted for each production department. Re-apportioned the overhead in the service department to the production department using the direct method. 2. Calculate the overhead absorption rate (OAR) for each production department using the following basis:

Jingga Sdn Bhd has three production departments - Machining, Assembly and Finishing; and two service departments - Maintenance and Store. The company has produced the following budgeted overhead costs for the year 2023: Allocated costs Insurance of Building Insurance of Machinery Rent on factory General supervision Electricity (lighting) Electricity (power Depreciation of Machinery Other information in respect of the departments is as follows: Machining Assembly Finishing Departments Allocated Costs (RM) Value of Machinery (RM) Kilowatt hours Number of employees Area occupied (square meters) Machine hours 36,000 30,000 38,000 20 500 60,000 12,000 24,000 15,000 20,000 40 600 30,000 60,000 30,000 5,000 12,000 50 800 10,000 30,000 Direct labour hours Cost of the service departments should be apportioned as follows: Service Departments Production Departments Assembly 20% 25% RM 120,000 96,000 30,000 48,000 74,400 18,000 64,800 72,000 Maintenance Store 18,000 Machining department - machine hours Assembly department - labour hours Finishing department - labor hours 3. Explain the term 'over absorbed' and 'under absorbed' of overhead 5,000 8,000 10 400 12,000 5,000 2,000 5 400 Machining 40% 45% Finishing 40% Maintenance Store 30% 1. Prepare an overhead analysis statement to show the overhead costs budgeted for each production department. Re-apportioned the overhead in the service department to the production department using the direct method. 2. Calculate the overhead absorption rate (OAR) for each production department using the following basis:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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### Jingga Sdn Bhd Overhead Allocation Analysis for 2023 **Company Overview:** Jingga Sdn Bhd operates three production departments: Machining, Assembly, and Finishing. Additionally, it maintains two service departments: Maintenance and Store. This document outlines the budgeted overhead costs for the year 2023 and the corresponding allocations to each department. #### Budgeted Overhead Costs for 2023 - **Allocated Costs**: RM 120,000 - **Insurance of Building**: RM 96,000 - **Insurance of Machinery**: RM 30,000 - **Rent on Factory**: RM 48,000 - **General Supervision**: RM 74,400 - **Electricity (Lighting)**: RM 18,000 - **Electricity (Power)**: RM 64,800 - **Depreciation of Machinery**: RM 72,000 #### Departmental Information - The costs and other relevant information for each department are provided in the table below: | Departments | Machining | Assembly | Finishing | Maintenance | Store | |----------------------|-----------|----------|-----------|-------------|--------| | **Allocated Costs (RM)** | 36,000 | 24,000 | 30,000 | 18,000 | 12,000 | | **Value of Machinery (RM)** | 30,000 | 15,000 | 5,000 | 5,000 | 5,000 | | **Kilowatt Hours** | 38,000 | 20,000 | 12,000 | 8,000 | 2,000 | | **Number of Employees** | 20 | 40 | 50 | 10 | 5 | | **Area Occupied (Sq M)**| 500 | 600 | 800 | 400 | 400 | | **Machine Hours** | 60,000 | 30,000 | 10,000 | | | | **Direct Labour Hours**| 12,000 | 60,000 | 30,000 | | | #### Service Departments Cost Apportionment - The costs of the service departments should be apportioned to the production departments as
Transcribed Image Text:### Jingga Sdn Bhd Overhead Allocation Analysis for 2023 **Company Overview:** Jingga Sdn Bhd operates three production departments: Machining, Assembly, and Finishing. Additionally, it maintains two service departments: Maintenance and Store. This document outlines the budgeted overhead costs for the year 2023 and the corresponding allocations to each department. #### Budgeted Overhead Costs for 2023 - **Allocated Costs**: RM 120,000 - **Insurance of Building**: RM 96,000 - **Insurance of Machinery**: RM 30,000 - **Rent on Factory**: RM 48,000 - **General Supervision**: RM 74,400 - **Electricity (Lighting)**: RM 18,000 - **Electricity (Power)**: RM 64,800 - **Depreciation of Machinery**: RM 72,000 #### Departmental Information - The costs and other relevant information for each department are provided in the table below: | Departments | Machining | Assembly | Finishing | Maintenance | Store | |----------------------|-----------|----------|-----------|-------------|--------| | **Allocated Costs (RM)** | 36,000 | 24,000 | 30,000 | 18,000 | 12,000 | | **Value of Machinery (RM)** | 30,000 | 15,000 | 5,000 | 5,000 | 5,000 | | **Kilowatt Hours** | 38,000 | 20,000 | 12,000 | 8,000 | 2,000 | | **Number of Employees** | 20 | 40 | 50 | 10 | 5 | | **Area Occupied (Sq M)**| 500 | 600 | 800 | 400 | 400 | | **Machine Hours** | 60,000 | 30,000 | 10,000 | | | | **Direct Labour Hours**| 12,000 | 60,000 | 30,000 | | | #### Service Departments Cost Apportionment - The costs of the service departments should be apportioned to the production departments as
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