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Question 4

Kimpal Sdn Bhd (KSB) manufactures specialty clothes for teenagers, the following data was extracted from KSB:

During April 2021, DSB worked on a special order, job no. ML12. Cost and production data for each order are shown as follows:

ACC1113 (FA) / Page 4 of 5

	Cutting Department	Sewing Department	Finishing Department
Budgeted labour hours Budgeted machine hours Hourly wage rate Production overheads	20,000 11,200 RM9.70 RM210,000	18,000 9,300 RM9.30 RM135,000	10,000 25,000 RM9.00 RM60,000

Direct materials Silk

Cotton Polyester Buttons, beads

Direct Labour: Cutting Department Sewing Department Finishing Department

Machine Hours spent in each department: Cutting Department Sewing Department Finishing Department

550 metres 600 metres 450 metres

RM7,000

750 hours 550 hours 500 hours

350 hours 200 hours 850 hours

Additional information:

• During this months, 950 units of job no. ML12 were produced.

• Silk costs RM40 per metre, cotton costs RM35 per metre and polyester costs RM20 per

  metre.

• Basis of overhead absorption rate for Cutting and Sewing Department is direct labour hour,

  and Finishing Department is machine hour.

• Selling and distribution overheads are charged to the job based on 15% of the production

  cost.

• Profit is to be maintained at 20% on selling price.

1. a) Compute overhead absorption rate (OAR) for each department

2. (b) Calculate the following for job no. ML12:

   1. (i) Prime cost

   2. (ii) The production cost

   3. (iii) Total cost

   4. (iv) Unit cost

   5. (v) Selling price per unit if the profit is to be maintained at 20% on total cost. (2 marks)

Note: (a) Round your answers to TWO (2) decimal points (b) Show all your relevant working.

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