RM000 Expenses Incurred Indirect materials 278 225 112 Indirect labour 641 488

Rm000 expenses incurred indirect materials 278 225

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RM’000 Expenses Incurred: Indirect materials 278 225 112 Indirect labour 641 488 418 Accrued Expenses: Rent, rates and insurance 120 90 40 Depreciation 350 50 72 Supervision 400 280 100 Other Expenses: Lighting and heating 51 38 12 Specialist servicing of equipment 18 Window cleaning contract 8 5 2 At the end of each month, the expenses of the Maintenance Department are apportioned to the production departments on the basis of the total expenses of those departments. The overhead absorption rates for the month of March 2009 were calculated using the following data: Machining Assembly Estimated overhead for the month RM2,160,000 RM1,400,000 Estimated machine hours 144,000 Estimated direct labour hours 2,240,000 Required: a) Calculate the overhead absorption rates for the month of March 2009 for Machining and Assembly departments. (2.5 marks) b) Prepare a statement showing the actual overhead incurred by the production departments for the month of March 2009. (13.5 marks) c) Calculate the extent to which the overhead expenses were over or under absorbed by the production departments during March 2009. (4 marks)
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