Question

In: Accounting

. Tun Teja Sdn Bhd (TTSB) is an organization that offers a variety of plastic bottles...

. Tun Teja Sdn Bhd (TTSB) is an organization that offers a variety of plastic bottles for home use. TTSB has FOUR (4) departments comprising TWO (2) service departments and TWO (2) production departments. ONE (1) service department utilizes machine hours for cost allocation, while another service department allocates its cost using number of employees. Costs information for the current year are based on the following data: Moulding Assembly Maintenance Cafeteria Overhead cost RM33,250 RM42,750 RM52,000 RM90,000 Machine hours 7,500 5,000 9,500 3,000 Number of employees 15 25 10 9 Nurul Ain, the newly employed staff of TTSB, is given a responsibility to make the allocation using the step-down method. Nurul Ain has allocated service department that incur the lowest costs first to other departments. REQUIRED: (a) Comment on the Nurul Ain practice in allocating service departments costs above. (b) Allocate the service department costs to the production departments by using stepdown method. (c) List TWO (2) differences between direct method and reciprocal method.

Solutions

Expert Solution


Related Solutions

Thomas Sdn Bhd is a computer manufacturer. The summarised accounts of Thomas Sdn Bhd for the...
Thomas Sdn Bhd is a computer manufacturer. The summarised accounts of Thomas Sdn Bhd for the years 2019 and 2020 are given below. Thomas Sdn Bhd Income Statement for the Year Ended 31 December 2019 2020 RM’000 RM’000 Sales 200 280 Cost of goods sold (150) (210) Gross profit 50 70 Administrative and selling expenses (38) (46) Interest expenses -0- (4) Net income 12 20 Thomas Sdn Bhd Statement of Financial Position as at 31 December 2019 2020 RM’000 RM’000...
The owners of ASPRO Sdn Bhd and ASPIA Sdn Bhd decided to combine their business in...
The owners of ASPRO Sdn Bhd and ASPIA Sdn Bhd decided to combine their business in which a new company named ASPRO ASPIA Bhd was formed to take over the businesses of both companies from 1 January 2020. Below are their balance of accounts as at 31 December 2019. Balance of accounts as at 31 December 2019 ASPRO (RM) ASPIA (RM) Property, plant and equipment 400,000 600,000 Investment property 200,000 100,000 Cash 40,000 10,000 Trade receivables 100,000 60,000 Inventories 60,000...
Sinar Mutiara Sdn Bhd produces a variety of watches. One of the components used in making...
Sinar Mutiara Sdn Bhd produces a variety of watches. One of the components used in making the watch is XM leather which obtains from Korean supplier at the cost of RM50 per unit. The monthly usage of XM Leather is 200 units. The company decided to limit the number of orders to two times per annum to minimise its total cost. The following data is made available: • Delivery cost is RM125 per order. • Administration cost is RM20 per...
Sinary Maju Sdn. Bhd. is a manufacturing company that produces plastic ware product. This company operates...
Sinary Maju Sdn. Bhd. is a manufacturing company that produces plastic ware product. This company operates a variances accounting system. Each unit of the product has the following standard requirements: Description Quantity Price per unit RM Direct material 20 kgs RM2 per kg 40 Direct labour 10 hours RM5 per hour 50 Variable overhead 10 hours RM3 per hour 30 Annual budgeted fixed overhead are RM864,000. Budgeted production of plastic ware product is 1,800 units. The following actual data was...
A. Gita Rani Sdn Bhd (GR) is a plastic manufacturer, which operates from a large production...
A. Gita Rani Sdn Bhd (GR) is a plastic manufacturer, which operates from a large production facility, where it undertakes continuous production 24 hours a day, seven days a week. The company’s production facility includes two warehouses, where the company’s raw materials and finished goods are stored. GR’s year end is 31 December. GR is finalizing the arrangements for the year-end inventory count, which is to be undertaken on 31 December 2019. The finished plastic bottle are stored in the...
QUESTION 1 (60 MARKS) Feast E-Mart Sdn. Bhd. is an online grocery store that offers home...
QUESTION 1 Feast E-Mart Sdn. Bhd. is an online grocery store that offers home delivery of groceries to customers around Changlun, Jitra, and Alor Setar. Feast E-Mart purchases their supplies of grocery products from suppliers in Kedah, Perlis and Penang. The shop is located at the new Kedah SME Industrial area beside the Kedah River. Installation of surveillance camera at entrance area is expected to be completed in two months. Due to a limited building space, a warehouse is built...
QUESTION 1 (60 MARKS) Feast E-Mart Sdn. Bhd. is an online grocery store that offers home...
QUESTION 1 Feast E-Mart Sdn. Bhd. is an online grocery store that offers home delivery of groceries to customers around Changlun, Jitra, and Alor Setar. Feast E-Mart purchases their supplies of grocery products from suppliers in Kedah, Perlis and Penang. The shop is located at the new Kedah SME Industrial area beside the Kedah River. Installation of surveillance camera at entrance area is expected to be completed in two months. Due to a limited building space, a warehouse is built...
Bubble Company produces a variety of bottles from recycled plastic. The company has one particular machine...
Bubble Company produces a variety of bottles from recycled plastic. The company has one particular machine on which it can produce either of two types of water bottles, 1-liter bottles or 1/2-liter bottles. Sales demand for both products is such that the machine could operate at full capacity on either of the products, and Bubble can sell all output at current prices. One unit of the 1/2-liter product requires one hour of machine time per unit of output, and one...
One of the subsidiary of the company Dronedelivery Sdn Bhd is producing delivery drones. With the...
One of the subsidiary of the company Dronedelivery Sdn Bhd is producing delivery drones. With the existing technology, their variable per unit is $480 and annual fixed cost, including maintenance expenses, total $1,120,000. However, with the proposed new technology variable costs, are projected to be cut in half to $240 per unit while fixed costs are expected to double to $3,240,000. Given the anticipated new costs structure and no change in the pricing structure of the drones, the breakeven level...
Southern Glass manufactures glass bottles for a variety of products, including perfume bottles and liquor bottles....
Southern Glass manufactures glass bottles for a variety of products, including perfume bottles and liquor bottles. The company has two profit centers: production and labeling. The production department melts the raw materials, adding metal oxides to produce different colors if desired. It then uses a continuous rolling process to shape the bottles. Production then transfers the bottles to the labeling department at an average cost of $15 ($12 variable; $3 fixed) per case. The labeling department then paints or attaches...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT