Assignment -Answer

MANAGEMENT ACCOUNTING 1
(a)

Overhead absorption rate =

RM10,000 100,000 50,000

= RM2/machine
10,000 20,000 50,000

hour
(1 mark)
RM10,000
Carving OAR = 40,000 = RM0.25 / labour hour

(1 mark)
RM100,000
Assembly OAR =
= RM5 / machine hour
20,000

(1 mark)
RM50,000
Painting OAR = 50,000 = RM1 / machine hour

(1 mark)
(b)

Job No: A116 (1m)

Direct material Direct labour -

Carving (1m)
Assembly (1m)
Carving (1m)
Assembly (1m)
Painting (1m)

Prime cost
Overheads
Carving (1m)
Assembly (1m)
Painting (1m)
Total production cost (1m)
(c)

RM RM
500
600 1,100 (1m)
100
300
20
420 (1m)
1,520 (1m)
10
250
60

320
1,840

Carving Department
Overhead absorbed: 8,000 x RM0.25 (0.5m)
Actual overhead
Under absorption (0.5m)

RM 2,000
2,500
500

Assembly Department
Overhead absorbed: 5,000 x RM5 (0.5m)
Actual overhead
Over absorption (0.5m)

RM 25,000
24,000
1,000

Painting Department
Overhead absorbed: 6,000 x RM1 (0.5m)
Actual overhead

RM 6,000
6,000
NIL
(Total : 20 marks)