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15042020-105321PM Cost Accounting Assignment 1
The following data is provided by Naseer Textile for the year
| Inventories: | Jan, 01 | Dec, 31 |
| Material | Rs. 58,000 | Rs.33,000 |
| Work in process | 69,000 | 38,000 |
| Finished goods | 74,000 | 65,000 |
| Additional information: | ||
| Building | Rs.6,000,000 | |
| Purchases | 460,000 | |
| Sales discounts | 7,000 | |
| Factory overheads paid | 38,000 | |
| Marketing and Admin Expense paid | 345,000 | |
| Depreciation 2% (90% manufacturing, 10% marketing & Admin) | ||
| Sales | 1,700,000 | |
| Factory wages | 400,000 | |
| Factory supervisor salary | 70,000 | |
| Office payroll | 125,000 | |
| Carriage in | 7,500 | |
| Carriage out | 4,000 | |
| Mark up on long term loan | 16,000 | |
| Income tax | 40% | |
Required: Prepare income statement for the year end.
Q-2
Farhan Auto parts Company uses job order costing system. The estimated costs and other estimated data for 2018 year were estimated, follows:
Indirect materials costs ……………………………. Rs 120,000
Indirect labor costs ………………………………… Rs 100,000
Energy consumption of plant ………………………Rs 300,000
Energy consumption of administration ……………Rs 100,000
Insurance expense of Plant Building ………………Rs 70,000
Insurance expense of Administration Building ……Rs 50,000
Depreciation expense of Administration Building … Rs 55,000
Depreciation expense of Plant Building ……………Rs 160,000
Rent expense of Administration Building …………Rs 140,000
Repair and maintenance of plant …………………..Rs 20,000
Machine hours estimated …………………………..Rs 20,000
hours Direct labor hours estimated ……………………….Rs 40,000 hours
A Company gets a particular job for manufacturing Products, called “Piston Sleeves-Alto Car” (Job number allotted: Job# 1011) in the month of January, 2018.
The actual direct materials issued on this job, dated: 09/01/2018 and 15/01/2018: Rs85, 000 and Rs75, 800 respectively.
The actual direct labor worked on this job, dated: 10/01/2018 and 17/01/2018: 200 direct labor hours and its amount: Rs50, 000 and 250 direct labor hours and its amount: Rs52,500 respectively. Company applies factory overhead cost on this Job “on basis of predetermined factory overhead rate per direct labor hour.
Required:
i). Show the necessary calculations for determining predetermined factory overhead rate per direct labor hour and per Machine hour.
ii).What will be the cost of this particular Job? {i.e., Prepare Job order cost sheet}
ii).What should company quote sales price for this job, if company’s practice is to take 25% markup on each Job’s cost?
Q-3
Maple leaf Company is a manufacturing firm that uses job order costing system. On January 1, the beginning of its fiscal year, the company’s inventory balances were as follows:
Raw materials $20,000
Work in process $15,000
Finished Goods $30,000
The company applies overhead cost to jobs on the basis of machine-hours worked. For the current year, the company estimated that it would work 75,000 machine-hours and incur $450,000 in manufacturing overhead cost. The following transactions were recorded for the year
- Raw materials were purchased on account, $410,000.
- Raw materials were requisitioned for use in production, $380,000 ($360,000 direct materials and $20,000 indirect materials).
- The following costs were incurred for employee services: direct labor, $75,000; indirect labor, $110,000; sales commission, $90,000; and administrative salaries, $20,000.
- Sales travel costs were $17,000.
- Utility costs in the factory were $43,000.
- Advertising costs were $180,000.
- Depreciation was recorded for the year, 350,000 (80% relates to factory operations, and 20% relates to selling and administrative activities).
- Insurance expired during the year, $10,000 (70% relates to factory operations, and 30% relates to selling and administrative activities).
- Manufacturing overhead was applied to production. Due to greater than expected demand for its products, the company worked 80,000 machine-hours during the year.
- Goods costing $9, 00,000 to manufacture according to their job cost sheets were completed during the year.
- Goods were sold on account to customers during the year at a total selling price of $1,500,000. The goods cost $870,000 to manufacture according to their job cost sheets.
Required:
- Prepare journal entries to record the preceding transactions.
- Post the entries in (1) above to T-accounts (don’t forget to enter the beginning balances in the inventory accounts).
- Is manufacturing overhead under applied or over applied for the year? Prepare journal entry to close any balance in the manufacturing overhead account to cost of goods sold.
Q-4
For each item listed, state whether a job order costing system or process costing system would be best.
- television repair
- cell phone charge cords
- glassware with company logo
- dog food
- golf balls
- hotel signs to welcome guests
- highlighters and pens
Q-5
National tiles Company limited uses process costing system. For the month of January, 2020, the following production data is provided to you for Department -2:
Quantitative data:
- Transferred in during the month from Department -1………………………. 40,000 units
- Transferred- out during the month to finished goods store……………….. 30,000
- Work in process at the end of the month…………………………………………. 8,000
{70% completed as per conversion cost}
Numerical data:
Cost received from department: 1 …………………………………… Rs. 1,200,000
Direct labor cost incurred in department: 2 ……………………….…800,000
Factory overhead cost incurred in department: 2 …………………… 1,000,000
Additional information:
- All losses are normal
- Direct materials are input in Department- I
- Work in process opening inventory is NIL.
Required:
Prepare cost of production Report for Department -2 for the month of January, 2020
Reference ID: #getanswers2001165