Additional Question of Chapter 5 : Manufacturing Overhead

Question 1
Setulus Hati Berhad uses a predetermined overhead rate to allocate manufacturing overhead
cost. The related informations are as follows:
a) Budgeted production overhead cost for the current period is RM112,000.
b) Budgeted direct labour cost is RM168,000.
c) Budgeted direct labour hour is 28,000 hours.
d) Actual direct labour hour of October is 2,500 hours.
e) Actual direct labour cost of October is RM15,000.

Required:
i) Compute the Predetermined Overhead Rate (POR) based on direct labour hour.
ii) Compute the Predetermined Overhead Rate (POR) based on direct labour cost.
iii) Compute the Applied Manufacturing Overhead of October based on POR computed for (i).
iv) Compute the Applied Manufacturing Overhead of October based on POR computed for
(ii).

Question 2
MAXi is one of the products produced by Perniagaan Seri Wang. On January 2010, the
company expected to incur the following:
Budget:
Machine hours 2,800 hours
Direct labour costs RM12,000
Direct material costs RM60,000
Manufacturing overhead costs RM21,000

At the end of January 2010, the company had actually incurred:

Machine hours 2,240 hours
Units of finished goods 280 units
Direct labour costs RM11,200
Direct material costs RM67,200
Manufacturing overhead costs RM26,800

Perniagaan Seri Wang uses direct labour cost as its activity base for assigning overhead costs
to MAXi job.

Required:
a) Compute the Predetermined Overhead Rate (POR) and Applied Manufacturing
Overhead.
b) Compute the total production costs and cost per unit of MAXi.
c) Compute the amount of overhead that was overapplied or underapplied.
Question 3
Syarikat Bentara Biru uses job order costing with a predetermined overhead allocation rate,
computed as a percentage of direct labour costs.
The company estimated the following amounts for producing 200 units of products in January
2012:

Budgeted production overhead costs RM8,320

Direct material costs RM11,200
Direct labour costs RM10,400
Direct labour hours 3,200 hours
Machine hours 2,800 hours

1. The following costs occurred during January 2012:

Direct material costs RM14,700
Direct labour costs RM13,000
Manufacturing overhead costs RM11,800

2. The job (200 units) had been completed in January.

Required:
a) Compute the applied manufacturing overhead costs of January.
b) Compute the product cost per unit.
c) Compute the amount of overhead that was overapplied or underapplied.
d) Prepare the journal entry to adjust for underapplied or overapplied overhead.