Reference no: EM132568955

At the beginning of the year, Izati Sdn Bhd (ISB) estimted the following:

                                  Finishing Dpt                      MachiningDpt

Overhead                  RM45,000                         RM50,000

Direct labor hours            15,000                          10,000

Machine hours                30,000                             25,000

ISB uses departmental overhead rates. In the finishing department, overhead is applied on the basis of direct labour hours. In the machining department, overhead is applied on the basis of machine hours. Actual data for the month of March are as follows:

                                   Finishing Dpt                  Machining Dpt

Overhead                RM29,000                           RM34,000

Direct labor hours         10,000                                 2,000

Machine hours              6,800                                     5,000

During the year, several jobs were completed.Data pertaining to one such job, Job 12 are as follows:

Direct materials RM200

Direct labour cost:

Finishing (10 hours @ RM5 per hour) RM50

Machining (25 hours @ RM3 per hour) RM75

Machine hours used:

Finishing 30

Machining 20

Required:

Question a) Calculate the predetermined overhead rates for the assembly and testing departments.(two decimal point).

Question b) Compute product cost for Job 12.

Question c) Recalculate the product cost for Job 12 using blanket overhead rate (use machine hours).