a
Subject:AccountingPrice: Bought3
a. Singer has applied overhead of RM75,000 and actual overhead of RM90,000 for the month of October. It applies overhead based on direct labor hours and those equaled 15,000 in October. Overhead for the year was estimated to be RM 1,000,000.
Compute the estimated direct labor hours for the year.
b. Singer Sdn Bhd makes treadmills. The company controller wants to calculate the fixed and variable cost associated with the janitorial costs incurred in the factory. Data for the past four months were collected.
Month
Janitorial costs (RM)
Machine hours
September
12,000
710
October
11,600
675
November
10,400
610
December
10,925
650
Using the high-low method calculate the fixed cost of janitorial services.
c. Valser Enterprise incurred the following costs and machine for the months of June and July.
Types of cost
April (RM)
May (RM)
Insurance
20,000
20,000
Factory supplies
4,000
5,000
Direct labour
30,000
37,500
Maintenance
6,500
6,750
Machine hours
2,000
2,500
i) Assuming that the driver for all costs is machine hours, determine the cost behavior of
each of the four type of costs above (fixed, variable or mixed).
ii) Assume that the following is the cost formula for maintenance cost. Total maintenance
cost = RM 5,000 + (0.05 × no of machine hours). Construct a cost formula to be use
to estimate total monthly costs within the relevant range.
iii) Estimate the total monthly costs to be incurred by Valser Enterprise at a level of 1200 machine hours.
