Question 2
Subject:BusinessPrice: Bought3
Question 2. Acer Limited has several production departments. The assembly department it has been estimated that RM375,000 of overhead should be charged to that particular department. These are charges to a customer: Assembly Specific Unit Department Number of Units 80,000 Direct material 700,000 8.00 cost Direct labor cost 2,275,000 30.00 Prime cost 2,750,000 40.00 Direct labor 375,000 3.50 hours Machine hours 75,000 0.75 The account is not sure which overhead absorption rate to adapt. Required: Calculate the overhead to be absorbed by a specific unit passing through the assembly department using each of the following overhead absorption rates methods. a. Specific units b. Percentage of direct material cost. c. Percentage of direct labor unit. d. Percentage of prime cost. e. Direct labor hours. f. Machine hours.
