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I-Asgn2 - LESSON 2 Assignment Question 1(20 marks Computer...

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LESSON 2 Assignment Question 1 (20 marks) Computer question Before you attempt this question, you should work through Computer illustration 2-1 in the Lesson Notes. Description The Pacific Manufacturing Company operates a job-order cost system and applies overhead cost to jobs on the basis of direct labour cost. In computing an overhead rate for the year, the company’s estimates were: manufacturing overhead cost, $126,000; and direct labour cost, $84,000. The company’s inventory accounts at the beginning and end of the year were as follows: January 1 December 31 (beginning of year) (end of year) Raw materials $ 21,000 $ 16,000 Work in progress 44,000 40,000 Finished goods 68,000 60,000 The following actual costs were incurred during the year: Purchase of raw materials (all direct) $ 133,000 Direct labour cost 80,000 Manufacturing overhead cost Insurance, factory 7,000 Depreciation of equipment 18,000 Indirect labour 42,000 Property taxes 9,000 Maintenance 11,000 Rent, building 36,000 Required a. (4 marks) (i) Compute the predetermined overhead rate for the year. (ii) Compute the amount of under- or overapplied overhead for the year. b. (4 marks) Prepare a schedule of Cost of goods manufactured for the year. c. (5 marks) Compute the Cost of goods sold for the year (do not include any under- or overapplied overhead in your cost of goods sold figure). What options are available for disposing of under- or overapplied overhead? Management Accounting Fundamentals Assignment 2 1
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d. (3 marks) Job 137 was started and completed during the year. What price would have been charged to the customer if the job required $3,200 in materials and $4,200 in direct labour cost, and the company priced the job at 40% above cost to manufacture? e. (4 marks) Direct labour made up $8,000 of the $40,000 ending Work in progress inventory balance. Supply the information missing below: Direct materials $ ? Direct labour 8,000 Manufacturing overhead ? Work in progress inventory $ 40,000 Answer requirements 1, 4, and 5 manually. Use the following procedure to answer requirements 2 and 3. Procedure 1. Open file MA1L2Q1. 2. Examine the layout of the worksheet. Rows 6 to 24 form the data table and contain the data from the problem. Rows 25 to 51 contain a Schedule of Cost of goods manufactured and rows 55 to 61 contain a Schedule of Cost of goods sold. To complete requirement 2 3. Enter in cell C23 the amount of overapplied or underapplied overhead for the year as calculated in requirement 1. 4. Enter in cells C30 to C33, D34, D36, C38 to C45, D46 to D51 the appropriate formulas to complete the Schedule of Cost of goods manufactured. To complete requirement 3 5. Enter in column D of rows 57 to 61 the formulas to complete the Schedule of Cost of goods sold, and save your completed worksheet. 6. Select cells A1 to D62 on your completed worksheet. Choose Edit Copy to copy these cells, then switch to your word-processing program to paste these cells in the appropriate place in your assignment document.
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