Suggested Solutions_ Assignment #3.pdf - 1...

• 4

This preview shows page 1 - 2 out of 4 pages.

1 Assignment #3_Product Costing Suggested Solutions Assignment #3 _ Product Costing Part 1 _ Job Costing a) Calculating OAR Overhead Absorption Rate (OAR) = Total Estimated O/H/Total Estimated Units of CD OAR = \$4,200,000/35,000 Direct Labour Hours = \$120.00/Direct Labour Hour b) Calculating Total Manufacturing Cost for Each Job Direct Materials Direct Labour Manufacturing Overhead Applied Total Manufacturing Cost Job 401 \$100,000 \$220,000 (1,[email protected] \$120.00) \$144,000 \$464,000 Job 402 81,000 190,000 (1,000 @ \$120.00) \$120,000 \$391.000 Job 403 90,000 205,000 (1,100 @ \$120.00) \$132,000 \$427,000 Job 404 150,000 290,250 (1,800 @ \$120.00) \$216,000 \$656,250 Total \$421,000 \$905,250 \$612,000 c) Journal Entries DATE ACCOUNTS & EXPLANATIONS DR CR (i) Materials Inventory \$500,000 Accounts Payable \$500,000 (ii) Manufacturing Wages \$1,065,000 Wages Payable \$106,500 (iii) WIP Inventory \$421,000 Materials Inventory \$421,000 WIP Inventory \$905,250 Manufacturing Wages \$905,250 (iv) Manufacturing Overhead \$80,000 Materials Inventory \$80,000 (v) Manufacturing Overhead \$159,750 Manufacturing Wages \$159,750 (vi) Manufacturing Overhead \$300,000 Accumulated Depreciation-Factory Equipment \$300,000 (vii) Manufacturing Overhead \$112,750 Various Accounts \$112,750 (viii) WIP Inventory \$612,000 Manufacturing Overheads \$612,000 (ix) Finished Goods \$(464,000 + 391,000 +427,000) \$1,282,000 WIP Inventory \$1,282,000 (x)