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Assignment 1 - Working for Question1 Part A Adjustment 1...

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Working for Question1 Part A Adjustment 1 : Property Tax calculated per month $3,000 = $ 500 per month 6 months This $500 should be included in the monthly cost data for the months of March, April, May, June, July, August, September, October, November. Moreover, the amount of $3,000 should be subtracted from the month of June overhead because the whole amount has been allocated to the month of June Adjustment 2 : Depreciation calculated per month $4,300 = $430 per year 10 years $430 = $36 per month 12 months This $36 should be included in the monthly cost data for the months of March, April, May, June, July, August, September, October, November. Adjustment 3: no adjusting entry required The $8000 factory depreciation is a fixed portion of overhead cost and is already stated in the provided monthly cost data. Therefore, no adjustment is required. Adjustment 4 : no adjusting entry required No adjustment is required because the overhead cost and direct labour hours are outliers for the month of July. An outlier may represent highly unusual circumstances and they should be eliminated from the analysis. Adjustment for the month of August August 5 th : $5,500 = $550 per day 10 Days $550 * 5 days = $2,750 S11042178 AF201 Assignment 1
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The adjusted amount for the month of August that is $2,750 should be removed from the August overheads and should be added to the month of July overhead because these amounts comprise indirect labour payroll for the month of July. Adjustment for the month of September September 2 nd : $6,000 = $600 per day 10 Days Payroll Data for the month of August $600 * 8 days = $4,800 Payroll Data for the month of September $600 * 2 days = $1,200 The payroll data for the month of august which is $4,800 should be removed from the September overheads and be added to August overhead because these amounts comprise indirect labour payroll for the month of August.
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