ACC116: Rose Leather Berthed Produces A Variety Of Leather Products: Introduction To Cost Accounting Assignment, UOL, UK

Dec 11, 2023

University

Subject ACC116: Introduction To Cost Accounting

QUESTION 1

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 Rose Leather Berhad produces a variety of leather products. Given below are the many types of costs incurred for the first quarter of 2021.

Types of costs
1 Direct material costs 8 Rental of special equipment
2 Salary of production workers 9 Factory Power and electricity cost
3 Salary of supervisors 10 Designer fee
4 Advertisement expenses 11 Administration cost
5 Depreciation of sewing machines & equipment 12 Depreciation of office equipment
6 Salesman commission 13 Maintenance cost of machine
7 Factory building insurance 14 Insurance of office building

Required:

For each overhead costs below, state any four (4) examples from the above table.

1. Production overhead cost

2. Non-production overhead costs

QUESTION 2

 State the appropriate basis for the following activities:

Activities Appropriate Basis
a Basis for apportionment of electricity costs
b Basis for apportionment of insurance of building cost
c Basis for reapportionment of overhead costs at the Store Room department
d Basis for reapportionment of overhead costs at the Maintenance department
e Basis for apportionment of building rental cost
f Basis for apportionment of Supervisors salaries cost
g Basis for reapportionment of overhead costs at the Canteen department
h Basis for reapportionment of overhead costs at Quality Control Department

QUESTION 3

Aiden Enterprise has two production departments, Mixing Department and Packaging Department.

Mixing

Department

Packaging

Department

Budgeted Production Overhead costs RM 250,000 RM 360,000
Actual production Overhead costs RM 320,000 RM 300,000
Budgeted machine hours 47,250 hours 1,000 hours
Actual machine hours 45,000 hours 1,500 hours
Budgeted Labour hours 4,500 hours 15,000 hours
Actual labour hours 5,000 hours 13,800 hours
Budgeted direct wages cost RM159,000 RM200,000
Actual direct wages cost RM120,000 RM 250,000
Budgeted direct material cost RM88,000 RM15,000
Actual direct material cost RM80,000 RM18,000
Budgeted units of production 10,000 units

Required:

 1. Assuming that Mixing Department uses more machine for production. Calculate the overhead absorption rate (OAR) for Mixing Department using the most appropriate

2. Assuming that Packaging Department are uses labour intensively for Calculate the overhead absorption rate (OAR) for Packaging Department using the most appropriate basis.

3. Calculate the SINGLE / BLANKET overhead absorption rate using the percentage of prime cost

4. Based on your answer in (a), determine the over or under absorption of the overhead cost for Mixing

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