3
>Question
1
(
2
0
marks)
A
B
C
Company
employs
a
job-order
cost
accounting
system
and
keeps
perpetual
inventory
records.
The
following
transactions
occurred
in
the
first
month
of
operations:
1irect
materials
requisition
during
the
month:
6
57
,000
58
2labour
incurred
and
charged
to
jobs
was:
Job56
Job57$16,000
Job58
3overhead
was
applied
based
on
75%
of
direct
labour
costs.
4manufacturing
overhead
costs
totalled:
556
consisting
of
units
58
consisting
of
units
jobs
were
completed
during
the
month.
D |
||||||||||
Job |
5 |
$10,000 |
||||||||
Job | $1 |
4 |
||||||||
Job |
$16,000 |
|||||||||
$40,000 |
||||||||||
Direct | ||||||||||
$12,000 |
||||||||||
$18,000 |
||||||||||
$46,000 |
||||||||||
Manufacturing | ||||||||||
Actual | ||||||||||
$36,000 |
||||||||||
Job | 2000 | |||||||||
Job | 400 | |||||||||
These |
Instructions
- Prepare
journal
entries
to
record
the
above
transactions.
-
H
ow
much
manufacturing
overhead
was
applied
to
Job
57
during
the month?
- Calculate the unit costs of Jobs 56 and 58.
- What is the balance in
Work in Process
Inventory at the end of the month?
- Determine if manufacturing overhead was under- or over-applied during the month. By how much?
Question 2 (20 marks)
ABC Manufacturing is a small manufacturer that uses machine hours as its activity base for assignment of overhead costs to jobs.
The company estimated the following amounts for the current year and for
Job 62
.
CompanyJob 62
Direct Materials |
$60,000 |
$4,000 |
|||||
Direct Labour |
$ |
25,000 |
$2,500 |
||||
Manufacturing Overhead |
$54,000 |
||||||
Machine Hours |
90,000 |
1,350 |
|||||
During the Year: |
|||||||
94,000 Actual Machine Hours |
|||||||
$54,000 Actual Overhead Costs |
Instructions
- How much is predetermined overhead rate?
- How much are the total manufacturing costs of Job 62?
- How much is total overhead over- or under-applied for the year?
- What is the gross profit before adjusting for any under-applied or over-applied overhead when
$15,000
equals the total proceeds from the sale of Job 62?
Question 3 (20 marks)
The following information is available for ABC Company at the end of last year:
nd of Year
inished
oods
$25,000
Work in ProcessDirect Materials$15,000$10,000Direct Labour
$160,000
Start of Year |
E |
||
F |
G |
$26,000 |
|
$160,000 |
$153,000 |
||
$14,500 |
|||
During the year the following information was recorded: |
|||
$75,000 |
Raw Materials Bought |
||
Indirect Materials |
|||
$125,000 |
Total Wages |
||
$80,000 |
|||
$20,000 |
Indirect Labour |
||
Balance was Sales and Administration |
|||
Other Manufacturing Overhead |
|||
$180,000 |
Manufacturing Overhead Applied |
Instructions
- Prepare a cost of goods manufactured schedule for last year.
- Calculate the over- or under-applied manufacturing overhead for the year.
Question 4 (20 marks)
ABC Manufacturing produces a product in two departments: production and assembly.
The company uses a process cost accounting system.
Prepare the journal entries to record the following transactions:
Descriptions not needed.
A$125,000B$80,000$15,000CD$25,000Ehrs
FG$80,000H
Purchased Raw Materials on Account |
||||
Raw Materials Requisitioned for Production Dept |
||||
Raw Materials Requisitioned for Assembly Dept |
||||
$175,000 |
Direct Labour Costs Incurred |
|||
$50,000 |
Factory Labour Used by Production Dept |
|||
Factory Labour Used by Assembly Dept |
||||
Manufacturing Overhead is based on machine hours in each dept. |
||||
140 |
hrs |
$26.00 |
/Machine hr Production Dept |
|
600 |
$19.00 |
/Machine hr Assembly Dept |
||
$100,000 |
Completed Production Dept sent to Assembly Dept. |
|||
Completed Assembly Dept transferred to
Finished Goods . |
||||
$70,000 |
Finished Goods sold on account. |
|||
$110,000 |
Value of the sale. |
Question 5 (20 marks)
ABC Company has several processing departments. Costs to be accounted for in the assembly department for October were, $ 1,202,400.
Direct Materials
$100,000Direct LabourManufacturing Overhead
25,000
Work in Process Inventory, Oct 1 |
|
$29,000 |
|
$16,500 |
Conversion Costs |
$916,000 |
Direct Materials Added During Oct |
$140,900 |
|
units were in beginning work in process. |
|
425,000 |
units started this month. |
35,000 |
units in ending inventory. |
40% |
complete in terms of conversion costs. |
100% |
of Direct Materials are added at the start. |
Instructions
Using the Weighted-Average Method,
- Determine the equivalent units of production and unit production costs for the assembly department.
- Determine the assignment of costs to goods completed and transferred out, and work in process inventory.
- Prepare a production cost report for the assembly department for October.