Feb 2008 MT.solution

Feb 2008 MT.solution - Commerce 294 Sauder School of...

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1 Commerce 294 Sauder School of Business Mid-term Examination February 27, 2008 Name: ....................................................... Signature: . ....................................................... Student number: ...................................... Aziz’ Sections: ORANGE [Circle your section number.] Tran’s Section: GREEN Time: 120 minutes Total Marks: 100 This examination booklet contains 16 pages (including this page). Check to ensure this paper is complete. No graphics calculators are permitted. Please show all your calculations in an orderly format for part marks. Time management is crucial. Be sure to answer each question. No questions will be permitted during this examination. READ CAREFULLY. If you need to make an assumption, state it and continue. Read the questions carefully before making any assumptions. At the end of the examination please STOP WRITING when instructed to do so, follow the directions of the invigilators regarding handing in your paper, and remain seated until instructed to leave. _____ 201 ( 8:30 AM) M/W Aziz _______ 202 (10:00 AM) M/W Aziz _______ 203 (10:00 AM) T/TH Tran #1 ________ #2 ________ #3 ________ #4 ________ Total / 100
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2 Question 1 (16 marks; suggested time 19 minutes) Job Order Costing Michelson Company is a manufacturing firm that uses job-order costing. The company's inventory balances at the beginning of the year were as follows: Beginning Balance Raw materials $14,000 Work in process $27,000 Finished goods $62,000 The company applies overhead to jobs using a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated that it would work 33,000 machine hours and would incur $165,000 in variable and $66,000 in fixed manufacturing overhead costs. The following transactions were recorded for the year: a. Raw materials purchased: $315,000. b. Raw materials requisitioned for use in production: $307,000 ($281,000 direct and $26,000 indirect). c. The following employee costs were incurred: Direct labour: $377,000 Indirect labour: $96,000 Administrative salaries: $172,000 d. Selling costs: $147,000. e. Factory utility costs: $10,000. f. Depreciation for the year: $127,000, of which $120,000 is related to factory operations and $7,000 is related to selling and administrative activities. g. Manufacturing overhead was applied to jobs. 34,000 machine hours were used during the year. h. Sales for the year: $1,253,000. i. The cost of goods manufactured: $914,000 j. The cost of goods sold: $913,000. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold. k. The Company has a December 31 st fiscal year end.
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3 Required: (a) What are the ending balances in Raw Materials, Work in Process, and Finished Goods Inventory as at December 31 st ? Use the following worksheets to organize your work. (12 marks) Raw Materials Add(subtract) Beg. Inventory $14,000 Purchases $315,000 Used in production ( 307,000) End. Inventory $ 22,000 Work-in-Progress
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Feb 2008 MT.solution - Commerce 294 Sauder School of...

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