ACCG 2000 Week 3 Homework Questions - to sumbit PDF

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ACCG 2000 Week 3 Homework Questions (Due in Week 4) Discussion Questions 1. The production of 100 cartons of cans of soft drinks could be costed as part of a job costing system or a process costing system. Do you agree? Explain. I believe the production of 100 cans of soft drinks could be costed as part of a process costing system as the nature of this operation would be associated with repetitive mass production as opposed to individual or bath processing. Exercises 1. Winc Pty Ltd bases its predetermined overhead rate on direct labour hours. Estimates and actual results for 2020 are shown below: Estimated overhead Actual overhead Estimated direct labour hours Actual direct labour hours Actual direct labour cost

$150,000 $110,000 30,000 20,500 60,000

Required: a) What is the predetermined overhead rate? 150,000/10000 = $15 per hour b) How much overhead would have been applied by Winc Pty Ltd to Work in Process during 2020? 10 x 20,500 = $250000 c) What is the amount of underapplied or overapplied overhead at the end of 2020 for Winc Pty Ltd? 250000 – 150000 = 100000

Problems 1. Avaya uses a job costing system. The March cost data were as follows: Raw materials purchased on credit Direct labour costs Raw materials issued to production Actual manufacturing overhead costs Cost of goods manufactured Sales (all on credit)

$ 400,800 417,250 368,030 319,680 1,185,700 1,351,200

Machine hours for March were 65,000 hours, and the business applies overhead to production at a rate of $6.00 per machine hour. The beginning raw materials inventory was $46,080. The beginning work in process inventory was $75,870. The beginning and ending finished goods inventories were $121,300 and $100,560 respectively.

Required: a) Prepare general journal entries to record the March transactions. DR CR Raw material inventory 400,800 Accounts payable 400,800 Work in process inventory 368,030 Raw material inventory 368,030 Work in progress inventory 417,250 Wage payable 417,250 Work in progress inventory 420,600 Manufacturing 420,600 overhead Cost of goods sold 1,185,700 Finished goods inventory 1,185,700 Accounts receivable 1,351,200 Sales revenue 1,351,200 Manufacturing overhead 54,960 Cost of goods sold 54,960 b) Was overhead overapplied or underapplied for the month of March? Underapplied c) Calculate the ending balances of raw materials and work in process. (Hint: Prepare T accounts for inventories.) 2. Swin Co. uses a job costing system, and manufacturing overhead is applied on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $1,200,000 of manufacturing overhead costs and use 60,000 machine hours. Swin Co recorded the following events during the month of October. (a) Beginning balances: Raw materials inventory (RM): $150,000 Work in process inventory (WIP): $170,000 Finished goods inventory (FGs): $50,000 (b) Purchased 250,000 kilograms of raw materials on account. The cost was $5.00 per kilogram. (c) Issued 200,000 kilograms of materials to production. Assume all materials issued are at $5 per kilogram. (d) Incurred $280,000 of direct labour costs and $60,000 of indirect labour costs. (e) Recorded depreciation on equipment for the month, $23,000. (f) Recorded $41,500 of insurance costs for the manufacturing property.

(g) Recorded $36,800 for utilities and other miscellaneous items for the manufacturing plant. (h) Completed job B20 costing $190,000 and job B21 costing $790,000 during the month and transferred them to Finished Goods inventory account. (i) Shipped job B21 to the customer during the month. (j) Used 11,000 machine hours during October. Required: Complete the relevant T- accounts to show the flow of costs through the company’s manufacturing accounts.

Raw Materials Inventory O/B 150,000

RM used 150,000 C/B 340,000 Purchases 790,000

Finished Goods Inventory O/B 50,000 WIP 980,00

COGS 790,000 CB 220000

Work in Process Inventory O/B 150,000

FG 980,000 CB 195,000

DM 1,000,000 DL 280,000 MOH 200,000

Cost of Goods Sold FG 790,000

MOH(adjusted) 6890

Manufacturing Overhead Indirect labour 60,000 Depreciation 23,000 Insurance costs 40,000 Utilities 32,000 COGS(adjusted) 6890

WIP 170,000...