QUESTION 1

1. Business Information

a) Background of the company

This business was established from the ancestors of his family. As a good and beautiful
grandson, he continued his family's legacy by opening a pants factory. Over time, this
business began to grow and became a well-known brand internationally.
Irongirl Sdn. Bhd. is a private limited company (Sdn. Bhd.), established on 1 January 2020.
The company specializes in designing and producing high quality trousers for various
customer needs. The type of business entity is Sendirian Berhad (Sdn. Bhd.), which means
it operates as a private company with limited liability. The business was launched with an
initial capital of RM1,000,000, obtained from Maybank. This business has a total of 20
employees. This company produces 12000 units of pants in a year. This business consists
of 2 departments namely the mixing department and the packaging department each of
which has a supervisor.
b) Organization Chart
 c) Production process

Explanation for each process

1. Fabric sourcing and inspection

Selection of appropriate fabric material ( cotton , denim or polyester ). Quality
inspection for defects such as color inconsistencies of fabric flaws.

2. Fabric cutting process

Fabric is spread and layered using automated or manual techiques. Patterns are laid
out, and cutting machines or hand tools cut the fabric into required shopes.

3. Sewing and Assembly

Stitching off different fabric parts such as front panels, back panels, waistband and
pockets. Industrial sewing machines are used for efficiency and precision. Quality
inspection during and after sewing to ensure accuracy.

4. Trimmimg and Labeling

Addition of brand tags, size labels and care instructions extra threads of loose ends are
removed
- Production unit per year : 12000 unit
2. By referring to attachment 1

a) List and classify the manufacturing costs involved in the production process for
2024.

COST ITEM RM

Direct Material
Fabric

1unit = 2meters RM 120000

1meter = RM 5

12000 unit x 2meters = 24000 m

(RM 5/meter x 24000 meters)

Direct Labour
Sewing Operator = 4 employees
Cutting Operator = 4 employees

1 hour = RM 8
1 day = 8 hour work
1 year = 264 days work

264 days x 8hour = 2112 hour

RM 135 168
-Sewing Operator
RM 8/hour x 2112 = RM 16 896
RM 25 344 x 4 = RM 67 584

-Cutting Operator
RM8/hour x 2112 = RM 16 896
RM 25 344 x 4 = RM 67 584

Manufacturing Overhead
-Factory Equipment rent (RM 4800)
-Factory building insurance (RM 2000)
-Factory Utilities (RM 1500)
-Factory sewing supervisor salaries RM 80800
(RM 3000 x 12 = RM36 000)
-Factory packaging supervisor salaries
(RM 3000 x 12 = RM 36 000)
 -Factory Depreciation on factory
buildings (RM 500)

b) List and classify the non-manufacturing costs for 2024.

Selling Expenses RM
Advertising Expenses 4000
Promotion Expenses 5000

Administration Expenses RM
Office Equipment 3000
Office Utilities 1000
Cleaner salaries (RM 1500 x 12) 18 000
Maintanence Technical (RM1500 x 12) 18 000
Warehouse staff (RM1200 x 12) 14 400

c) You are required to include the beginning and ending inventory information.

Cost item Beginning Inventory (RM) Ending Inventory (RM)

Direct Material 24 000 2400
Work in process 50 000 4000
Finished goods 16 000 46 000

d) The purchased of direct material is based on estimated unit of production by

considering the beginning and ending inventory of direct material.

Unit RM
Beginning inventory 3 600 18 000
Purchase 8 400 42 000
Ending Inventory 1 000 5 000
 3) IRONGIRL SDN. BHD.

Statement of Costs of Goods Manufactured

For the year ended 31

RM RM
Direct Materials:
Beginning inventory of Direct Materials ( 12000 x 40% x 24000
RM5 )
(+) Direct Materials purchases ( 8400unit x RM5 ) 42 000
Direct Materials available for use 66 000
(-) Ending inventory of Direct Materials (2400)
Direct Materials Used 63 600
Direct Labour:
Sewing Operator 67 584
Cutting Operator 67 584 135 168
Manufacturing Overhead:
Factory equipment rent 4800
Factory building insurance 2000
Factory utilities 1500
Factory sewing supervisor salaries 36 000
Factory depreciation on factory buildings 500
Factory packaging supervisor salaries 36 000
Total manufacturing overhead 80 800
Total current manufacturing costs 279 568
(+) Beginning inventory of Work In Process 50 000
Total cost of Work In Process 329 568
(-) Ending inventory of Work In Process (4000)
Costs of Goods Manufactured 325 568

4) Calculate manufacturing cost per unit

= 12000 – 3200 + 9200

= 18000 units

Production cost per unit = RM 325 568 / 18000

= RM 18.09
5) List and calculate the period costs in 2024

Selling Expenses RM
Advertising Expenses 4000
Promotion Expenses 5000

Administration Expenses RM
Office Equipment 3000
Office Utilities 1000
Cleaner salaries (RM 1500 x 12) 18 000
Maintanence Technical (RM1500 x 12) 18 000
Warehouse staff (RM1200 x 12) 14 400

Total period cost : 4000 + 5000 + 3000 + 1000 + 18000 + 18000 + 14400

= RM 63 400
Question 2

Calculate and analyze any underapplied or overapplied overhead for each department and

underapplied or overapplied overhead of product. [24 marks]

MIXED DEPARTMENT PACKAGING DEPARTMENT

POR = RM 380 000 / 40000 POR = RM 288 000 / 320 000
= RM 9.50 = RM 9

APPLIED = RM 9.50 X 37 000 APPLIED = RM 9 X 50 000

= RM 351 500 = RM 450 000

MANUFACTURING OVERHEAD COST

MANUFACTURING OVERHEAD = RM 130 000 x 70%

UTILITY = RM 91 000

FACTORY = RM 112 500

INSURANCE = RM 200 000 x 5 / 8

= RM 125 000

RENTAL = RM 200 000 x 6 / 10

= RM 120 000

INDIRECT LABOR COST = RM 600 000 x 40%

= RM 240 000

FACTORY SUPERVISOR = RM 8000 x 2

= RM 16 000

TOTAL = RM 704 500

MIXED DEPARTMENT PACKAGING DEPARTMENT

ACTUAL = RM 704 500 X 35% ACTUAL = RM 704 500 X 65%

= RM 246 575 = RM 457 925

OVER / UNDER-APPLIED OVER / UNDER- APPLIED

= RM 351 500 – RM 246 575 = RM 450 000 – RM 457 925
= RM 104 925 = ( RM 7925 )
( OVER-APPLIED OVERHEAD) ( UNDER- APPLIED OVERHEAD)

TOTAL = RM 104 925 – RM 7925

= RM 97 000 ( OVER-APPLIED OVERHEAD)