TRU: ACCT 2251, Management/Managerial Accounting

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:

1

irect

materials

requisition

during

the

month:

6

57

,000

58

2

labour

incurred

and

charged

to

jobs

was:

Job

56

Job

57$16,000

Job

58

3

overhead

was

applied

based

on

75%

of

direct

labour

costs.

4

manufacturing

overhead

costs

totalled:

5

56

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

1. Prepare

   journal

   entries

   to

   record

   the

   above

   transactions.

2. H

   ow

   much

   manufacturing

   overhead

   was

   applied

   to

   Job

   57

   during

   the month?

3. Calculate the unit costs of Jobs 56 and 58.
4. What is the balance in

   Work in Process

   Inventory at the end of the month?

5. 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

1. How much is predetermined overhead rate?
2. How much are the total manufacturing costs of Job 62?
3. How much is total overhead over- or under-applied for the year?
4. 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 Process

Direct Materials$15,000

$10,000

Direct 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

1. Prepare a cost of goods manufactured schedule for last year.
2. 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$125,000

B$80,000

$15,000

C

D

$25,000

E

hrs

F

G$80,000

H

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 Labour

Manufacturing 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,

1. Determine the equivalent units of production and unit production costs for the assembly department.
2. Determine the assignment of costs to goods completed and transferred out, and work in process inventory.
3. Prepare a production cost report for the assembly department for October.