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ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has three (3) production departments; Department A, Department B and Department C. Department A and Department C are labour oriented, while Department B is 95% machine oriented. ZC Phone Manufacturing also has two (2) service departments, namely Maintenance and Store. The company forecasts the following costs for the year ended March 2018. Dept A RM 5,500 85,000 Dept C RM 4,000 68,000 Cost element Total RM 15,000 Dept B RM 2,000 Maintenance RM 2,200 65,000 Store RM 1,300 Direct labour Indirect 350,000 75,000 57,000 material 20,000 250,000 7,500 Indirect labour Other overhead cost Rent & rates Depreciation of 120,000 plant & Machinery Power 3,000 60,000 6,000 2,000 30,000 1,500 25,000 75,000 60,000 35,000 20,000 Additional information: Dept A 60 155,000 55 500 20% 25,000 80,000 20% Dept C 30 100,000 60 500 20% 35,000 85,000 20% Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Maintenance 15 100,000 Store 20 119,000 10 150 10% 50 10% Required: Prepare an overhead analysis sheet showing the basis for apportionment made. Use Repeated Distribution Method for Reapportionment. (Answers are to be stated to the nearest RM). a) Calculate the overhead absorption rate (OAR) for each production department using b) appropriate basis. (Answers are to be rounded up to two decimal points).

ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has three (3) production departments; Department A, Department B and Department C. Department A and Department C are labour oriented, while Department B is 95% machine oriented. ZC Phone Manufacturing also has two (2) service departments, namely Maintenance and Store. The company forecasts the following costs for the year ended March 2018. Dept A RM 5,500 85,000 Dept C RM 4,000 68,000 Cost element Total RM 15,000 Dept B RM 2,000 Maintenance RM 2,200 65,000 Store RM 1,300 Direct labour Indirect 350,000 75,000 57,000 material 20,000 250,000 7,500 Indirect labour Other overhead cost Rent & rates Depreciation of 120,000 plant & Machinery Power 3,000 60,000 6,000 2,000 30,000 1,500 25,000 75,000 60,000 35,000 20,000 Additional information: Dept A 60 155,000 55 500 20% 25,000 80,000 20% Dept C 30 100,000 60 500 20% 35,000 85,000 20% Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Maintenance 15 100,000 Store 20 119,000 10 150 10% 50 10% Required: Prepare an overhead analysis sheet showing the basis for apportionment made. Use Repeated Distribution Method for Reapportionment. (Answers are to be stated to the nearest RM). a) Calculate the overhead absorption rate (OAR) for each production department using b) appropriate basis. (Answers are to be rounded up to two decimal points).

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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ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has three (3) production departments; Department A, Department B and Department C. Department A and Department C are labour oriented, while Department B is 95% machine oriented. ZC Phone Manufacturing also has two (2) service departments, namely Maintenance and Store. The company forecasts the following costs for the year ended March 2018. Cost element Total RM 15,000 350,000 Dept A RM 5,500 Dept B RM 2,000 75,000 Dept C RM 4,000 68,000 Maintenance RM 2,200 65,000 Store RM 1,300 57,000 Direct labour Indirect 85,000 material Indirect labour Other overhead cost Rent & rates Depreciation of 120,000 plant & Machinery Power 20,000 7,500 3,000 60,000 6,000 2,000 1,500 250,000 75,000 60,000 30,000 25,000 35,000 20,000 Additional information: Dept C 30 100,000 60 500 20% 35,000 85,000 20% Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Dept A 60 155,000 55 500 20% 25,000 80,000 20% Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Maintenance 15 100,000 Store 20 119,000 10 150 10% 50 10% Required: Prepare an overhead analysis sheet showing the basis for apportionment made. Use Repeated Distribution Method for Reapportionment. (Answers are to be stated to the nearest RM). a) b) Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points).
Transcribed Image Text:ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has three (3) production departments; Department A, Department B and Department C. Department A and Department C are labour oriented, while Department B is 95% machine oriented. ZC Phone Manufacturing also has two (2) service departments, namely Maintenance and Store. The company forecasts the following costs for the year ended March 2018. Cost element Total RM 15,000 350,000 Dept A RM 5,500 Dept B RM 2,000 75,000 Dept C RM 4,000 68,000 Maintenance RM 2,200 65,000 Store RM 1,300 57,000 Direct labour Indirect 85,000 material Indirect labour Other overhead cost Rent & rates Depreciation of 120,000 plant & Machinery Power 20,000 7,500 3,000 60,000 6,000 2,000 1,500 250,000 75,000 60,000 30,000 25,000 35,000 20,000 Additional information: Dept C 30 100,000 60 500 20% 35,000 85,000 20% Floor area (sq metre) Value of machinery (RM) Number of employees Maintenance Hours Material handling (%) Machine hours Direct labour hours Horse power (%) Dept A 60 155,000 55 500 20% 25,000 80,000 20% Dept B 35 280,000 20 2,000 40% 75,000 35,000 60% Maintenance 15 100,000 Store 20 119,000 10 150 10% 50 10% Required: Prepare an overhead analysis sheet showing the basis for apportionment made. Use Repeated Distribution Method for Reapportionment. (Answers are to be stated to the nearest RM). a) b) Calculate the overhead absorption rate (OAR) for each production department using appropriate basis. (Answers are to be rounded up to two decimal points).
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