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Tutorial Solutions for Topic 4

# Tutorial Solutions for Topic 4 - Solutions to Tutorial on...

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ACCT2102 ACCT2102 Topic 4: Accounting for Manufacturing Operatings: Job  Costing Systems Readings: Chapter 4 (to page 118) Tutorial questions set in Course Outline: Theory questions: 4-1; 4-2; 4-6; 4-8; 4-9 Practical Exercises: 4-17; 4-24; 4-25 Problems: 4-30 TODAY’S TUTORIAL DISCUSSION From Course Outline Questions: (1)  4-17 (2)  4-24 (3)  4-30 Additional Questions: 1 Solutions to Tutorial on Topic 4 – week  commencing 19/3/2007

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ACCT2102 (1) 4-26 (part 2 only) ** next week part 3 (2) 4-37 (replace requirements in the text with new ones) 4-17 (1) Actual OH rate under Actual costing system: = Actual Manufacturing OH = \$1,862,000 Actual DL cost \$980,000 = \$1.90 per DL dollar, (or 190%) Budgeted OH rate under Normal costing system: = Budgeted Manufacturing OH = \$1,750,000 Budgeted DL cost \$1,000,000 = \$1.75 per DL dollar, (or 175%) (2) Job #626 Actual Costing Normal Costing DM \$40,000 \$40,000 DL 30,000 \$30,000 OH 57,000 52,500 Total Manufacturing costs of Job #626 \$127,000 \$122,500 OH Applied under actual costing: \$30,000 x \$1.90 = \$57,000 OH Applied under normal costing: \$30,000 x \$1.75 = \$52,500 (3) Actual OH = \$1,862,000 Applied OH = \$1,715,000 (1.75 x \$980,000) Under applied \$ 147,000 The amount of under/over applied overhead is the difference between the amount of overhead actually incurred, and the amount charged to jobs (and taken through the 2
ACCT2102 accounts into WIP, FG and COGS). Under actual costing, the amount charged to the jobs and taken through the accounts is the actual overhead, thus there can be no difference.

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