Question -
Malaysia Boleh Sdn Bhd has two departments A and B engaging in manufacturing operations and they are serviced by a Store department, Maintenance department and a Tool room. The following has been budgeted for the next financial period: Overheads (RM'000) Indirect labour -A 620 -B 846 -Stores 149 -Maintenance 115 -Tool room 107 Supervision 140 Power 160 Rent 280 Rates 112 Plant insurance 40 Plant depreciation 20 Additional information available includes: A B Stores Maintenance Tool room Floor area(m2) 1,000 2,500 1,100 600 400 No. of employees 30 50 10 20 30 Power (kilowatt) 60,000 30,000 3,000 15,000 12,000 No of material req. 5,000 6,000 - 2,000 3,000 Maintenance hours 8,000 9,000 - - 6,000 Plant valuation(RM) 50,000 40,000 - 5,000 5,000 Tool room hours estimated 7,000 10,000 - - - Machine hours estimated 55,200 99,000 - - -
Required: Calculate appropriate Machine Hour Overhead absorption rates for both manufacturing departments in which all overheads will be absorbed, and to show clearly the method of overhead allocation & apportionment. 8 Metal Boxers Sdn Bhd supplies machine parts according to customers' drawings specifications. The factory comprises the following production departments: Heavy machine (code HM) Light machine (code LM) Manual Finishing (code F).